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A, B and C share profits in the ratio 3:2:5. C retires, and A and B adopt a new ratio of 2:3. Who acquires the larger share?

Answer and explanation

Correct answer: B

To compare gains, first express old and new shares as fractions of the whole. The original total is 10, so A held 3/10 and B held 2/10. The new ratio 2:3 has total 5, so A now holds 2/5=4/10 and B holds 3/5=6/10. A therefore gains 4/10−3/10=1/10. B gains 6/10−2/10=4/10. Since 4/10 is greater than 1/10, B acquires the larger share. Thus option A is correct. Option B reverses the comparison, option C ignores the unequal gains, and option D is impossible because both continuing partners together acquire C’s share.

Related tags

Compare GainsRetirementNew RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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