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A, B and C share profits in the ratio 8:3:4. After C retires, A and B agree to share future profits in the new ratio 1:1. What is B’s gaining share?

Answer and explanation

Correct answer: 3/10

The total old ratio is 8+3+4=15, so B’s old share was 3/15=1/5. Under the new 1:1 ratio, B’s share becomes 1/2. Therefore, B’s gaining share = new share − old share = 1/2 − 1/5 = 3/10. Exam tip: a partner’s gaining share is calculated by subtracting the old share from the new share; 1/2 is B’s new share, not the gain.

Related tags

Gaining RatioPartner RetirementNew Profit Sharing RatioAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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