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A, B and C share profits in the ratio 7:5:4. C retires, and the new profit-sharing ratio of A and B is 2:1. Which partner gains more?

Answer and explanation

Correct answer: अ

The governing concept is comparison of old and new profit shares. The old total is 7+5+4=16, so A’s old share is 7/16 and B’s old share is 5/16. After C retires, the new ratio 2:1 gives A 2/3 and B 1/3. A’s gain is 2/3−7/16 = 32/48−21/48 = 11/48. B’s gain is 1/3−5/16 = 16/48−15/48 = 1/48. Since 11/48 is greater than 1/48, A gains more, so option A is correct. Both continuing partners gain because each new share exceeds the old share, but their gains are clearly unequal. The other options therefore do not fit the calculation.

Related tags

Gaining RatioRetirementProfit SharingGoodwill SettlementAccountancy Class 12Reconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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