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?
Answer & explanation
Correct answer: option 3
The correct answer is option 3- 7:4.
Old ratio between A, B, C is 1:1:1
New ratio between A & B is capital ratio means 30,000:25,000 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