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A, B and C share profits in the ratio 2:3:5. C retires, and the new ratio of A and B is 1:1. What will be the gaining ratio?

Answer and explanation

Correct answer: 3:2

The gaining ratio equals each continuing partner’s new share minus his or her old share. A originally held 2/10 and B held 3/10. Under the new 1:1 ratio, each partner receives 1/2 = 5/10. Therefore, A’s gain is 5/10 − 2/10 = 3/10, and B’s gain is 5/10 − 3/10 = 2/10. The gaining ratio is consequently 3/10:2/10 = 3:2, so option A is correct. The total gain is 5/10, exactly equal to C’s former share. Option B is the new ratio, option C reverses the calculated gains, and option D incorrectly assumes that both partners gain equally despite their different old shares.

Related tags

Gaining RatioEqual New RatioRetirementAccountancyNew RatiosReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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