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Partners A, B and C share profits in the ratio 5:2:3. When C retires, the new profit-sharing ratio of A and B becomes 7:3. What is A’s gain in share?

Answer and explanation

Correct answer: \(\frac{1}{5}\)

A’s old share was \(\frac{5}{5+2+3}=\frac{5}{10}\). Under the new ratio of 7:3, A’s new share is \(\frac{7}{10}\). Therefore, A’s gain is \(\frac{7}{10}-\frac{5}{10}=\frac{2}{10}=\frac{1}{5}\). Exam tip: Gain of a partner = New share − Old share.

Related tags

Gain CalculationNew RatioRetirement Of PartnerProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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