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A, B and C share profits in the ratio 9:5:1. C retires, and the new profit-sharing ratio of A and B becomes 2:1. What is A’s gaining share?

Answer and explanation

Correct answer: 1/15

The total old ratio is 9+5+1=15, so A’s old share is 9/15. After C’s retirement, A’s new share is 2/(2+1)=2/3=10/15. Therefore, A’s gaining share = new share − old share = 10/15−9/15=1/15. Option C represents A’s old share, not the share gained. Exam tip: Always calculate the gain by subtracting the old share from the new share.

Related tags

Gaining ShareRetirement Of PartnerNew RatioProfit Sharing RatioNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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