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

Answer and explanation

Correct answer: 1:4

Under the old ratio, A's share was 3/10 and B's share was 2/10. Converting the new ratio 2:3 into tenths gives A's share as 4/10 and B's share as 6/10. Therefore, A's gain is 4/10 − 3/10 = 1/10, while B's gain is 6/10 − 2/10 = 4/10. Hence, the gaining ratio is 1:4. Exam tip: Gain = New share − Old share.

Related tags

Gaining RatioPartner RetirementNew RatioProfit SharingAccountancyNew RatiosReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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