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A, B and C share profits in the ratio 2:3:5. C retires, and the new ratio of A and B is 5:5. What will be the gaining ratio?

Answer and explanation

Correct answer: 3:2

Gaining ratio is determined by comparing each continuing partner’s new share with his or her old share. The old total is 10, so A had 2/10 and B had 3/10. After C’s retirement, the new ratio 5:5 means each receives 5/10. A’s gain is 5/10 − 2/10 = 3/10, while B’s gain is 5/10 − 3/10 = 2/10. The common factor 1/10 can be omitted, giving a gaining ratio of 3:2. Therefore option A is correct. Options B and C merely describe the new ratio, not the increase in shares. Option D reverses the actual gains of A and B.

Related tags

Gaining RatioRetirementNew RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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