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A, B and C share profits in 1:3:6. C retires and the new ratio of A and B is 5:5. What is the gaining ratio?

Answer and explanation

Correct answer: 2:1

The governing concept is that the gaining ratio is calculated from the increase in each continuing partner’s share, not from the final new ratio alone. The original total is 10, so A’s old share is 1/10 and B’s old share is 3/10. Under the new ratio 5:5, each receives 5/10. A’s gain is therefore 5/10−1/10=4/10, while B’s gain is 5/10−3/10=2/10. The gains are 4/10:2/10, which reduce to 2:1. Option A is correct. Option B incorrectly assumes equal gains because the final shares are equal; C gives the new ratio rather than the gains; and D is merely the old ratio of A and B.

Related tags

Gaining RatioNew RatioRetirementNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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