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A, B and C share profits in the ratio 4:5:1. C retires, and the new ratio of A and B is 1:1. What is the gaining ratio?

Answer and explanation

Correct answer: 1:0

Gaining ratio is calculated by subtracting each continuing partner's old share from the corresponding new share. A's old share is 4/10, while his new share under 1:1 is 1/2, or 5/10. Therefore, A's gain is 5/10 - 4/10 = 1/10. B's old share is 5/10, and his new share is also 1/2 = 5/10, so B's gain is zero. The gains are therefore 1/10 and 0, which give the gaining ratio 1:0. Option B reverses the partners' gains, option C incorrectly assumes both gained, and option D is merely the old ratio of A and B.

Related tags

Gaining RatioRetirementNew And Old SharesNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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