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A, B, and C share profits in the ratio 2:4:4. C retires, and A and B’s new profit-sharing ratio is 1:2. What is their gaining ratio?

Answer and explanation

Correct answer: 1:2

A’s old share is 2/10 and its new share is 1/3, so A gains 1/3 − 1/5 = 2/15. B’s old share is 4/10 and its new share is 2/3, so B gains 2/3 − 2/5 = 4/15. Their gaining ratio is 2/15:4/15, or 1:2.

Related tags

New RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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