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A, B and C share profits in the ratio 3:4:5. When C retires, the new profit-sharing ratio of A and B becomes 5:4. What is A’s gaining share?

Answer and explanation

Correct answer: 11/36

A’s old profit share was \(3/(3+4+5)=3/12=1/4\). After C’s retirement, A’s new share is \(5/(5+4)=5/9\). Therefore, A’s gaining share is \(5/9-1/4=(20-9)/36=11/36\). Option B is A’s new share, not the gaining share. Exam tip: Gaining share = New share − Old share.

Related tags

Gaining ShareNew RatioPartner RetirementProfit Sharing RatioFraction CalculationNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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