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A and B have old profit-sharing shares of \(1/3\) and \(2/3\), respectively. Their new profit-sharing ratio is \(1:1\). What is A’s gaining share?

Answer and explanation

Correct answer: \(1/6\)

Under the new ratio \(1:1\), A’s new share is \(1/2\), while the old share was \(1/3\). Therefore, A’s gaining share = New share − Old share = \(1/2-1/3=1/6\). Option B is only A’s old share, not the gain. Exam tip: Gain = New share − Old share.

Related tags

Gaining ShareNew Profit Sharing RatioPartnership ReconstitutionAccountancy CalculationsNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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