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A, B and C share profits in the ratio 4:3:2. After C’s death, the new profit-sharing ratio of A and B becomes 5:4. What is B’s gaining share?

Answer and explanation

Correct answer: \(\frac{1}{9}\)

B’s old share was \(\frac{3}{4+3+2}=\frac{3}{9}\). After C’s death, the new ratio of A and B is 5:4, so B’s new share is \(\frac{4}{5+4}=\frac{4}{9}\). Therefore, B’s gaining share = new share − old share = \(\frac{4}{9}-\frac{3}{9}=\frac{1}{9}\). Option C is only B’s old share, not the gain. Exam tip: Calculate a gaining share as the new share minus the old share.

Related tags

Gaining ShareDeath Of PartnerNew RatioPartnership AccountingRetirement And DeathNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancy

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