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The retiring partner’s share of profit is 1/5. If the two remaining partners acquire this share equally, what will be each partner’s gaining share?

Answer and explanation

Correct answer: 1/10

The total share acquired from the retiring partner is 1/5. Since it is divided equally between two partners, each partner’s gaining share is 1/5 ÷ 2 = 1/10. The fraction 1/5 represents the total share acquired by both partners, not the share of each one. Exam tip: When partners gain equally, divide the retiring partner’s share by the number of gaining partners.

Related tags

Retirement Of PartnerGaining RatioNew RatioProfit Sharing FractionNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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