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A, B and C share profits in the ratio 3:3:4. When C retires, the new profit-sharing ratio of A and B becomes 2:1. What is A’s gaining share?

Answer and explanation

Correct answer: 11/30

A’s old profit share was \(3/(3+3+4)=3/10\). Under the new ratio of 2:1, A’s share is \(2/(2+1)=2/3\). Therefore, A’s gaining share = new share − old share = \(2/3-3/10=20/30-9/30=11/30\). The fraction 2/3 is A’s new share, not the gain. In exams, calculate the old and new shares first and then subtract the old share from the new share.

Related tags

Gaining ShareNew RatioPartnership AccountsRetirement Of PartnerNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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