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A, B and C share profits in the ratio 1:3:6. After C retires, the new profit-sharing ratio of A and B becomes 2:3. What is A’s gain in share?

Answer and explanation

Correct answer: \(\frac{3}{10}\)

A’s old share was \(\frac{1}{1+3+6}=\frac{1}{10}\). Under the new ratio 2:3, A’s new share is \(\frac{2}{5}=\frac{4}{10}\). Therefore, A’s gain is \(\frac{4}{10}-\frac{1}{10}=\frac{3}{10}\). The fraction \(\frac{2}{5}\) is A’s new share, not the gain. Exam tip: gain = new share − old share.

Related tags

Gain CalculationRetirement Of PartnerNew Profit Sharing RatioAccountancy Class 12New RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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