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A, B and C share profits in the ratio 6:2:2. After C retires, the new profit-sharing ratio of A and B becomes 5:5. What is B’s gaining share?

Answer and explanation

Correct answer: 3/10

B’s old profit share was 2/10. Under the new ratio 5:5, B’s new share is 5/10, or 1/2. Therefore, B’s gaining share = new share − old share = 5/10 − 2/10 = 3/10. Option 1/2 represents B’s new share, not the share gained. Exam tip: calculate gaining share as new share minus old share.

Related tags

Gaining SharePartner RetirementNew RatioProfit Sharing RatioAccountancyNew RatiosReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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