Question 10 of 38intermediate🔧 ApplyMCQ1 mark

Anand, Bahadur and Chander are partners. Sharing Profit equally On Chander’s retirement, his share is acquired by Anand and Bahadur in the ratio of 3:2. The New Profit Sharing Ratio between Anand and Bahadur will be–

Exercise: Test your Understanding – I | Q: 3 | (Page 11)
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Explanation

Option A is correct. The old profit sharing ratio of Anand, Bahadur and Chander is 1:1:1 (equal sharing). When Chander retires, his share of 1/3 is acquired by Anand and Bahadur in the ratio of 3:2. Anand acquires 3/5 of Chander's share = 3/5×15 \times 1/3 = 1/5. Bahadur acquires 2/5 of Chander's share = 2/5×15 \times 1/3 = 2/15. Anand's new share = 1/3 + 1/5 = 8/15. Bahadur's new share = 1/3 + 2/15 = 7/15. Thus, the New Profit Sharing Ratio between Anand and Bahadur is 8:7.

Solution Steps

  1. Step 1: Old profit sharing ratio = Anand : Bahadur : Chander = 1:1:1. Each partner's share = 1/3.

  2. Step 2: Chander's share (1/3) is acquired by Anand and Bahadur in 3:2 ratio.

  3. Step 3: Anand acquires = 3/5×15 \times 1/3 = 1/5. Bahadur acquires = 2/5×15 \times 1/3 = 2/15.

  4. Step 4: Anand's new share = 1/3 + 1/5 = 5/15 + 3/15 = 8/15.

  5. Step 5: Bahadur's new share = 1/3 + 2/15 = 5/15 + 2/15 = 7/15.

  6. Step 6: New Profit Sharing Ratio = 8/15 : 7/15 = 8:7.

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