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A, B and C share profits in the ratio 5:3:2. After C retires, the new profit-sharing ratio becomes 7:3. What is A’s gaining share?

Answer and explanation

Correct answer: 1/5

A’s old profit share was \(5/10\), while the new share is \(7/10\). Therefore, A’s gaining share is \(7/10 - 5/10 = 2/10 = 1/5\). Exam tip: gaining share is calculated as new share minus old share.

Related tags

Retirement Of PartnerGaining RatioNew Profit Sharing RatioAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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