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After a partner’s retirement, the new profit-sharing ratio of A and B is 12:11. If A’s old share in the profit was \(1/2\), what is A’s gaining share?

Answer and explanation

Correct answer: \(1/46\)

In the new ratio 12:11, A’s new share is \(12/(12+11)=12/23\). Gaining share = new share − old share = \(12/23-1/2=24/46-23/46=1/46\). Therefore, option A is correct. Option B is only A’s new share, while option C is A’s old share. Exam tip: Always subtract the old share from the new share to find the gaining share.

Related tags

Gaining ShareNew RatioRetirement Of PartnerPartnership AccountsProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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