Question

A, B, and C are partners sharing profits in proportion of 1/2 1/3 1/6 & If A retires, what will be the new profit sharing ratio?​

Answer 1

Answer:

2:1

Explanation:

Given the profit sharing ratio is

A:B:C = ¹/₂ : ¹/₃ : ¹/₆

L.C.M of 2,3,6 is 6

A's share = ¹/₂ × ³/₃ = ³/₆

B's share = ¹/₃ × ²/₂ = ²/₆

C's share = ¹/₆ × ¹/₁ = ¹/₆

A:B:C = 3:2:1

A retire from the firm so the new profit sharing ratio between B & C is 2:1

Answer 2

GIVEN :  A's share = $\frac{1}{2}$ ; B's share = $\frac{1}{3}$ ;  C's share = $\frac{1}{6 }$

TO FIND :  New Profit sharing ratio after the retirement of A

SOLUTION :

• As when any partner is admitted and retired the profit sharing ratio of the old partners is changed.

• So, as A is retiring so the profit sharing ration of B, C will also change.

Old Profit Sharing Ratio is

A = $\frac{1}{2}$

B =  $\frac{1}{3}$

C = $\frac{1}{6}$

• Now we will make the denominator equal , so we will take LCM of 2,3,6 and LCM will be 6.

• So, by equalising their denominator old profit sharing ratio will be A= $\frac{3}{6}$ , B= $\frac{2}{6}$ , C = $\frac{1}{6}$.

• As C is retiring and he is not giving his share to any partner so we will simply just remove his share and remaining partner will have their same share as new profit sharing ratio.

• So, new profit sharing ratio of B and C will be 2 : 1.

New profit sharing ratio of B and C is 2 : 1.