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A, B and C share profits in the ratio 8:2:5. C retires, and the new profit-sharing ratio of A and B becomes 3:2. What is the gaining ratio of A and B?

Answer and explanation

Correct answer: 1:4

Under the old ratio 8:2:5, A’s share was \(8/15\) and B’s share was \(2/15\). Under the new ratio 3:2, A’s share becomes \(3/5=9/15\) and B’s share becomes \(2/5=6/15\). Thus, A gains \(1/15\) and B gains \(4/15\), so the gaining ratio is \(1:4\). Remember that 3:2 is the new profit-sharing ratio, not the gaining ratio.

Related tags

Gaining RatioPartner RetirementNew RatioProfit Sharing RatioAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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