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A, B, C and D share profits in the ratio 6:3:3:2. After B's retirement, the new profit-sharing ratio of A, C and D becomes 5:4:5. What is the gaining ratio of C and D?

Answer and explanation

Correct answer: 1:3

Under the old ratio, C's share was 3/14 and D's share was 2/14. Under the new ratio, C's share is 4/14 and D's share is 5/14. Therefore, C gains 1/14 and D gains 3/14. Hence, their gaining ratio is 1:3. Exam tip: calculate each continuing partner's gain as new share minus old share.

Related tags

Goodwill-SettlementGaining-RatioRetirement-Of-PartnerProfit-Sharing-RatioPartnership-AccountingGoodwill SettlementReconstitution Retirement Or Death Of A PartnerAccountancy

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