Numerical

A, B, and C were partners in a firm sharing profits in the ratio of 8 : 4 : 3. B retires and his share is taken up equally by A and C. Find the new profit-sharing ratio.

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#### Solution

Old Ratio (A, B and C) = 8 : 4 : 3

B retires from the firm.

His profit share = `4/15`

B’s share taken by A and C in ratio of 1 : 1

`"Share taken by A" : 4/15 xx 1/2 = 2/15`

`"Share taken by C" : 4/15 xx 1/2 = 2/15`

New Ratio = Old Ratio + Share acquired from B

`"A's New Share" = 8/15 + 2/15 = 10/15 = 2/3`

`"C's New Share" : 3/15 + 2/15 = 5/15 = 1/3`

∴ New Profit Ratio (A and C) = 2 : 1

Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio

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