The old Profit Sharing ratio among M, N and P are 2:2:1. The New profit sharing ratio after N retirement is 3:2. The gaining ratio between M and P will be:
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 1:1.
Old ratio = 2:2:1 (M, N & P)
N retires
New ratio = 3:2
Gained share = new share - old share
Gained share of M = 3/5 - 2/5
= 1/5
Gained share of P = 2/5 - 1/5
= 1/5
Gaining ratio = 1/5 :1/5
= 1:1