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

Answer and explanation

Correct answer: 11:4

The old shares of A and B are \(3/15\) and \(7/15\), while their new shares are \(4/9\) and \(5/9\). Therefore, A’s gain is \(4/9-3/15=11/45\), and B’s gain is \(5/9-7/15=4/45\). Hence, the gaining ratio is \(11/45:4/45=11:4\). Remember that the gaining ratio is calculated from the increase in each partner’s share, not by simply stating the new ratio.

Related tags

Gaining RatioPartner RetirementNew RatioOld RatioProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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