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A, B and C share profits in the ratio 3:2:1. After C's retirement, A and B agree to share future profits in the new ratio 4:3. What is A's gaining share?

Answer and explanation

Correct answer: 1/14

A's old profit share was \(3/(3+2+1)=3/6=1/2\). Under the new ratio 4:3, A's new share is \(4/(4+3)=4/7\). Therefore, A's gaining share = new share − old share = \(4/7-1/2=(8-7)/14=1/14\). Exam tip: For a retiring partner question, calculate the gaining share by subtracting the old share from the new share.

Related tags

Gaining Share CalculationPartner RetirementNew Profit Sharing RatioAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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