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If partner A’s old profit share was 2/5 and his new profit share after reconstitution is also 2/5, what is A’s gaining share?

Answer and explanation

Correct answer: Zero

Gaining share = New profit share − Old profit share. Therefore, A’s gaining share = 2/5 − 2/5 = 0. Option B is incorrect because the difference between the two shares is not 1/5. In an exam, remember that a partner has no gain when the old and new shares are equal.

Related tags

Gaining RatioNew RatioOld RatioPartner RetirementNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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