Question

A, B and C are partners sharing profits in the ratio of 5 : 3 : 2. C retires and his share is taken up by A. Calculate new profit-sharing ratio of A and B.

Answer 1

New profit-sharing ratio of A and B is calculated below:

Explanation:

Given,

A, B and C are partners who are sharing profits in the ratio of 5 : 3 : 2.

Old Ratio in the A, B and C = 5: 3: 2

After C's retirement, his share is taken up by A

Re tiring Partner C's Profit Share $=\frac{2}{10}$

C's share is taken by A in entriety after his retirement.

Calculation of New Ratio:

New Ratio = Old Ratio + Share from C

New Ratio of A will be

$A's = \frac{5}{10}+\frac{2}{10}=\frac{7}{10}$

New ratio of B will be

$B's=\frac{3}{10}$

Therefore, the New Profit sharing Ratio of A and B=7: 3