Question

In the absence of any information regarding the acquisition of share in profit of the retiring partner by the remaining partners, it is assumed that they will acquire his/her share in .

• A. Old Profit Sharing Ratio
• B. New Profit Sharing Ratio
• C. Equal Ratio
• D. Any Ratio which is profitable to them

Hint:

If nothing is said, continuing partners keep their old relative shares.

Answer 1

The Correct Option is A

Step 1: Understanding the Concept:
When a partner retires, the remaining partners take over the retiring partner's share of profit. The way they divide that share among themselves is called the gaining ratio.

Step 2: Key Formula or Approach:
If the question or the deed says nothing about how the share is taken over, accounting practice assumes a default. The continuing partners take the share in the ratio in which they were already sharing profits, that is, the old profit sharing ratio among themselves.

Step 3: Check option (1) Old Profit Sharing Ratio:
The remaining partners were sharing profits in their old ratio before the retirement. With no other agreement, they simply divide the retiring partner's share in that same ratio. So (1) is CORRECT.

Step 4: Check option (2) New Profit Sharing Ratio:
The new ratio is the result of the retirement. It is not known before the share is taken over, so it cannot be the basis for taking it over. So (2) is wrong.

Step 5: Check options (3) and (4):
No rule says the share is split equally. Also, a ratio that is 'profitable to them' is not a fixed rule and can differ for every partner. So (3) and (4) are wrong.

Final Answer:
In the absence of any information, the remaining partners acquire the retiring partner's share in their old profit sharing ratio. This is option (1). \[ \boxed{\text{Old Profit Sharing Ratio (Option 1)}} \]