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A, B and C share profits in the ratio 4:6:5. When C retires, the new profit-sharing ratio of A and B becomes 2:5. What is A’s gaining share?

Answer and explanation

Correct answer: \(\frac{2}{105}\)

A’s old profit share is \(\frac{4}{4+6+5}=\frac{4}{15}\). After C’s retirement, A’s new share is \(\frac{2}{2+5}=\frac{2}{7}\). Therefore, A’s gaining share = new share − old share = \(\frac{2}{7}-\frac{4}{15}=\frac{30-28}{105}=\frac{2}{105}\). In such questions, subtract the old share from the new share to find the gaining share.

Related tags

Gaining ShareRetirement Of PartnerNew RatioProfit Sharing RatioAccountancy FractionsNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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