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A, B and C share profits in the ratio 3:5:2. B retires, and the new profit-sharing ratio between A and C is fixed at 7:3. What is C’s gaining share?

Answer and explanation

Correct answer: \(\frac{1}{10}\)

The old total ratio is \(3+5+2=10\), so C’s old share was \(\frac{2}{10}\). Under the new ratio 7:3, C’s new share is \(\frac{3}{10}\). Therefore, C’s gaining share = new share − old share = \(\frac{3}{10}-\frac{2}{10}=\frac{1}{10}\). The value \(\frac{3}{10}\) is C’s new share, not the gaining share. Exam tip: calculate a gaining share by subtracting the old share from the new share.

Related tags

Partner RetirementNew Profit Sharing RatioGaining ShareAccountancy Class 12ReconstitutionNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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