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A, B and C share profits in the ratio 7:1:2. C retires, and the new profit-sharing ratio between A and B is 3:2. What is B’s gaining ratio?

Answer and explanation

Correct answer: 3/10

B’s old profit share was \(1/10\). Under the new ratio of 3:2, B’s new share is \(2/5=4/10\). Therefore, B’s gaining ratio = new share − old share = \(4/10-1/10=3/10\). Option B, \(2/5\), represents B’s new share, not the gain. In such questions, calculate gaining ratio as ‘new share − old share’.

Related tags

Gaining RatioRetirement Of PartnerNew Profit Sharing RatioPartnership AccountsAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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