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A, B and C share profits in the ratio 5:5:4. After C retires, A and B agree to share profits in the new ratio 3:4. What is A’s gaining share?

Answer and explanation

Correct answer: 1/14

A’s old profit share was \(5/(5+5+4)=5/14\). Under the new ratio 3:4, A’s share is \(3/7=6/14\). Therefore, A’s gaining share = new share − old share = \(6/14-5/14=1/14\). Option B is A’s new share, not the gaining share. Exam tip: Always calculate gaining share as the new share minus the old share.

Related tags

Gaining ShareRetirement Of PartnerNew RatioProfit Sharing RatioAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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