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A, B and C share profits in the ratio 7:6:5. When C retires, the new profit-sharing ratio of A and B becomes 5:4. What is B’s gaining share?

Answer and explanation

Correct answer: 1/9

B’s old profit share is 6/(7+6+5) = 6/18 = 1/3. Under the new ratio 5:4, B’s share is 4/9. Therefore, B’s gaining share = new share − old share = 4/9 − 1/3 = 4/9 − 3/9 = 1/9. In such questions, first calculate each partner’s old and new fractional share, then subtract the old share from the new share.

Related tags

Retirement Of PartnerGaining ShareNew RatioProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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