Question 9 of 38intermediate🔧 ApplyMCQ1 mark

The old profit sharing ratio among Rajender, Satish and Tejpal were 2:2:1. The New Profit Sharing Ratio after Satish’s retirement is 3:2. The gaining ratio is–

Exercise: Test your Understanding – I | Q: 2 | (Page 11)
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Explanation

Option (C) is correct. The gaining ratio is calculated as the difference between the new profit sharing ratio and the old profit sharing ratio. Based on the formula Gaining Share = New Share - Old Share, Rajender's gain is 1/5 and Tejpal's gain is 1/5, resulting in a gaining ratio of 1:1.

Solution Steps

  1. Step 1: Calculate the Old Profit Shares. Rajender's Share = 2/5 and Tejpal's Share = 1/5 (since the old ratio was 2:2:1).

  2. Step 2: Identify the New Profit Shares. Rajender's Share = 3/5 and Tejpal's Share = 2/5 (since the new ratio is 3:2).

  3. Step 3: Calculate the Gaining Share using the formula: Gaining Share = New Share - Old Share.

  4. Step 4: Rajender's Gain = 3/5 - 2/5 = 1/5.

  5. Step 5: Tejpal's Gain = 2/5 - 1/5 = 1/5.

  6. Step 6: Determine the Gaining Ratio between Rajender and Tejpal = 1/5 : 1/5 = 1:1.

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