Question

A, B, C, and D are partners in a firm .Their profit sharing ratio is 4:3:2:1. On 31st March 2021 B retired his half share was taken by A and balance was equally taken by C and D. Calculate New Profit Sharing Ratio and Gaining Ratio​

Answer 1

New Profit Sharing Ratio =  2:1:1

Gaining Ratio​= 2:1

Given: A, B, C, and D are partners in a firm. Their profit sharing ratio is 4:3:2:1. On 31st March 2021 B retired his half share was taken by A and the balance was equally taken by C and D.

To Find: Calculate New Profit Sharing Ratio and Gaining Ratio​

Solution:

A, B, C, and D'S profit-sharing ratio= 4:3:2:1.

B is retiring so his share is 3/10.

This share is divided into 2 halves which is 3/20: 3/20 and one part goes to A while the other part is divided equally again among C and D

3/20 into two halves= 3/40: 3/40

So, the new profit sharing ratio is 3/20: 3/40: 3/40= 6:3:3

= 2:1:1

Gaining Ratio​ = New ratio - old ratio= (2:1:1) - (4:3:2:1.)

= 4:2 = 2:1

Therefore, New Profit Sharing Ratio =  2:1:1

Gaining Ratio​= 2:1

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Answer 2

Answer:

New profit sharing ratio = 2:1:1

Gaining ratio                   = 2:1:3    

Explanation:

Given, Old Profit sharing ratio = 4:3:2:1

Calculation of new profit sharing ratio

New Share of profit for A = $\frac{1}{2}$ of the total profit.

The balance is to be shared equally between C and D.

The new share of profit for B and C = $\frac{1}{2} * \frac{1}{2} = \frac{1}{4}$ of the total profit.

Therefore, new profit sharing ratio of A, C and D is-

$=\frac{1}{2} : \frac{1}{4} : \frac{1}{4}\\ = \frac{2}{4} : \frac{1}{4} :\frac{1}{4} \\= 2:1:1$

Calculation of Gaining Ratio

Gaining Ratio = New share - Old share

Gaining ratio of A = $\frac{2}{4} - \frac{4}{10} = \frac{10 - 8}{20} = \frac{2}{20}$

Gaining ratio of C= $\frac{1}{4} - \frac{2}{10} = \frac{5 - 4}{20} = \frac{1}{20}$

Gaining ratio of D= $\frac{1}{4} - \frac{1}{10} = \frac{5 - 2}{20} = \frac{3}{20}$

Gaining ratio of A: C: D = 2:1:3

Therefore, New profit sharing ratio = 2:1:1

                  Gaining ratio = 2:1:3

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