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A, B and C share profits in the ratio 3:7:5. After C retires, the new profit-sharing ratio of A and B becomes 4:5. What is A's gaining share?

Answer and explanation

Correct answer: 11/45

A's old profit share was 3/(3+7+5) = 3/15 = 1/5. Under the new ratio of 4:5, A's new profit share is 4/9. Therefore, A's gaining share = new share − old share = 4/9 − 1/5 = (20−9)/45 = 11/45. Option B gives only A's new share, not the gaining share. In such questions, subtract the old share from the new share to find the gaining share.

Related tags

Gaining ShareRetirement Of PartnerNew Profit Sharing RatioPartnership AccountingFraction CalculationNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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