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A, B and C share profits in the ratio 9:4:2. When C retires, A and B agree to share future profits in the new ratio 3:2. What will be the gaining ratio of A and B?

Answer and explanation

Correct answer: 0:1

Under the old ratio 9:4:2, A, B and C had shares of 9/15, 4/15 and 2/15 respectively. In the new ratio 3:2, A’s new share is 3/5 = 9/15, so A gains nothing. B’s gain is 2/5 − 4/15 = 6/15 − 4/15 = 2/15. Therefore, the gaining ratio of A:B is 0:2/15 = 0:1. Exam tip: subtract each partner’s old share from the new share to identify the gain.

Related tags

Gaining RatioRetirement Of PartnerNew Profit Sharing RatioPartnership AccountsNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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