A, B and C are partners sharing profits in the ratio 2:2:1.B retires and his share is taken
by C. Calculate new profit-sharing ratio of A and C
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Answer: New profit-sharing ratio between A and C will be 2:3.
Explanation: Old profit-sharing ratio among A, B and C= 2 : 2 : 1
Upon B's retirement, his whole share is taken over by C himself.
∴ New profit-sharing ratio:
A's new share = 2/5 (Remains the same)
C's new share= 1/5+2/5
= 3/5 (Gain)
Thus, new profit-sharing ratio between A and C= 2:3
In case of admission of a new partner, C would be firstly liable to sacrifice his shares for the admitting partner, unless specified by the partners.
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