Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

A, B, and C are partners with equal profit sharing ratios. Their fixed capitals are ₹30,000, ₹25,000 and ₹30,000 respectively. C decided to take retirement. A and B decided to continue the partnership firm and change their profit sharing ratio to Capital Ratio. What is the gaining Ratio of A and B?

Options:

6:5

1:1

7:4

3:2

Correct Answer:

7:4

Explanation:

Old ratio between A, B, C is 1:1:1
New ratio between A & B is capital ratio means 30000:25000 i.e. 6:5
Gain = New share - Old share
Gain of A = 6/11 - 1/3
               = (18-11)/33
               = 7/33
Gain of B = 5/11 - 1/3
               = (15-11)/33
               = 4/33
Gaining ratio = 7/33 :4/33
                     = 7:4