After the reconstitution of the partnership, A’s old profit-sharing share is \(\frac{2}{5}\) and the new share is \(\frac{1}{2}\). What is A’s gain?

Correct answer: \(\frac{1}{10}\)

Gain is calculated as the new profit-sharing share minus the old share. Thus, A’s gain = \(\frac{1}{2}-\frac{2}{5}=\frac{5-4}{10}=\frac{1}{10}\). Choosing \(\frac{1}{5}\) results from subtracting the fractions without using a common denominator. Exam tip: convert fractions to a common denominator before subtracting.