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A, B and C share profits in the ratio 2:6:2. B retires, and the new profit-sharing ratio of A and C becomes 3:2. What will be the gaining ratio of A and C?

Answer and explanation

Correct answer: 2:1

Under the old ratio, A and C had shares of 2/10 and 2/10 respectively. Under the new ratio, A receives 3/5 and C receives 2/5. Therefore, A’s gain is 3/5 − 2/10 = 2/5, while C’s gain is 2/5 − 2/10 = 1/5. Hence, the gaining ratio is 2/5 : 1/5 = 2:1. Exam tip: Calculate each gaining partner’s gain by subtracting the old share from the new share.

Related tags

Gaining RatioPartner RetirementNew Profit Sharing RatioAccountancyNew RatiosReconstitution Retirement Or Death Of A PartnerClass 12 Mcq

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