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If B’s old profit-sharing share is \(\frac{1}{4}\) and his new profit-sharing share is \(\frac{3}{8}\), what is B’s gaining share?

Answer and explanation

Correct answer: \(\frac{1}{8}\)

Gaining share = new share − old share. Therefore, B’s gaining share is \(\frac{3}{8}-\frac{1}{4}=\frac{3}{8}-\frac{2}{8}=\frac{1}{8}\). Option C is only the old share, not the gain. In an exam, use the formula new share − old share to calculate a partner’s gaining share.

Related tags

AccountancyPartnershipReconstitutionGaining ShareGoodwill SettlementReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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