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A, B, C and D share profits in the ratio 5:3:2:2. After D retires, the new profit-sharing ratio of A, B and C becomes 4:3:2. What is the gaining ratio of B and C?

Answer and explanation

Correct answer: 3:2

Under the old ratio, B’s share was 3/12 and C’s share was 2/12. Under the new ratio, B’s share is 3/9, so B’s gain is 3/9 − 3/12 = 1/12. C’s gain is 2/9 − 2/12 = 1/18. Therefore, the gaining ratio of B and C is 1/12 : 1/18 = 3:2. Exam tip: calculate gaining ratio as new share minus old share; do not directly use the new ratio 3:2 without checking the gains.

Related tags

Goodwill-SettlementGaining-RatioPartner-RetirementProfit-Sharing-RatioAccountancyGoodwill SettlementReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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