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A, B and C share profits in the ratio 8:3:4. C retires, and A and B adopt a new ratio of 1:1. What will be their gaining ratio?

Answer and explanation

Correct answer: 0:1

The gaining ratio must be calculated from the increase in each continuing partner’s share. The old total is 15, so A’s old share is 8/15 and B’s old share is 3/15=1/5. Under the new 1:1 ratio, each receives 1/2. A’s gain is 1/2−8/15=(15−16)/30, which is actually −1/30; A’s share decreases. B’s gain is 1/2−1/5=3/10=9/30. Since A is not a gainer and B gains 9/30, the gaining ratio is 0:9, or 0:1 after simplification. Therefore option B is correct. Options C and D wrongly treat A as a gainer or assume equal gains, while 7:9 confuses old-share comparisons with gains.

Related tags

Gaining RatioOne GainerRetirementNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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