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A, B and C share profits in the ratio 6:4:5. On C’s retirement, A and B agree to share future profits in the new ratio 5:4. What is B’s gaining share?

Answer and explanation

Correct answer: \(\frac{8}{45}\)

B’s old profit-sharing share was \(\frac{4}{6+4+5}=\frac{4}{15}\). After C’s retirement, B’s new share is \(\frac{4}{5+4}=\frac{4}{9}\). Therefore, B’s gaining share = new share − old share = \(\frac{4}{9}-\frac{4}{15}=\frac{8}{45}\). In such questions, subtract the partner’s old share from the new share to find the gaining share.

Related tags

Partnership AccountsGaining ShareNew Profit-Sharing RatioRetirement Of PartnerNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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