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A, B and C share profits in the ratio 2:5:3. After A retires, B and C agree to share profits in the new ratio 6:4. What will be the gaining ratio of B and C?

Answer and explanation

Correct answer: 1:1

Under the old ratio 2:5:3, B’s share was 5/10 and C’s share was 3/10. Under the new ratio 6:4, B’s share becomes 6/10 and C’s share becomes 4/10. Therefore, B gains 6/10 − 5/10 = 1/10 and C gains 4/10 − 3/10 = 1/10. Hence, their gaining ratio is 1:1. Exam tip: Gaining ratio = New share − Old share; the retiring partner’s share is not included in this ratio.

Related tags

Gaining RatioRetirement Of PartnerNew Profit Sharing RatioPartnership AccountingNew RatiosReconstitution Retirement Or Death Of A PartnerAccountancyClass 12 Mcq

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