Question

A,B and C share profits and losses of the firm equally. B retires from business and his share is

purchased by A and C in the ratio of 2:3. New profit sharing ratio between A and C respectively

would be:
a) 01 : 01

b) 02 : 02

c) 07 : 08

d) 03 : 05​

Answer 1

Answer:

Correct option is

C

7:8

Old ratio (A, B and C) = 1 : 1 : 1

B's share = 1/3

B's share taken by A = (1/3) * (4/10) = 4/30 or 2/15

B's share taken by C = (1/3) * (6/10) = 6/30 or 3/15

New ratio = Old ratio + Share taken from B

A's new share = (1/3) + (2/15) = 7/15

C's new share = (1/3) + (3/15) = 8/15

Therefore, new profit sharing ratio between A and C is 7 : 8