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A and B's old shares are 1/3 and 2/3 respectively. Their new ratio is 1:1. What is B's gaining share?

Answer and explanation

Correct answer: Zero

A partner has a gaining share only when the new share exceeds the old share. B's old share was 2/3, whereas the new ratio 1:1 gives B a share of 1/2. The difference is new share minus old share: 1/2 - 2/3 = 3/6 - 4/6 = -1/6. The negative result means B has sacrificed or lost 1/6, not gained it. In a gaining-share calculation, a partner whose share decreases is assigned zero gain; the decrease is considered a sacrifice. Therefore B's gaining share is zero. Option B incorrectly treats the loss as a gain, option C is merely the final share, and option D is the old share. Hence option A is correct.

Related tags

Gaining ShareSacrificeNew RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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