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A, B and C share profits and losses in the ratio 3:4:3. A retires, and the new ratio of B and C becomes 7:5. What is the gaining ratio of B and C?

Answer and explanation

Correct answer: 11:7

Under the old ratio, B’s share was 4/10 = 24/60 and C’s share was 3/10 = 18/60. Under the new ratio of 7:5, B’s share becomes 7/12 = 35/60 and C’s share becomes 5/12 = 25/60. Therefore, B’s gain is 35/60 − 24/60 = 11/60, while C’s gain is 25/60 − 18/60 = 7/60. Hence, the gaining ratio is 11:7. Exam tip: Calculate each partner’s gain as new share minus old share, then compare the gains.

Related tags

Gaining RatioRetirement Of PartnerNew RatioPartnership AccountingProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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