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A, B and C share profits in the ratio 2:4:4. C retires, and the new profit-sharing ratio of A and B becomes 3:7. What will be the gaining ratio of A and B?

Answer and explanation

Correct answer: 1:3

Under the old ratio, A’s share was \(2/10\) and B’s share was \(4/10\). Under the new ratio of 3:7, their shares are \(3/10\) and \(7/10\), respectively. Thus, A gains \(1/10\) and B gains \(3/10\), giving a gaining ratio of \(1:3\). Exam tip: Calculate gain as new share minus old share, then reduce the gains to their simplest ratio.

Related tags

Gaining RatioRetirement Of PartnerNew RatioPartnership AccountsNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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