Question

P, Q and R are partners sharing profits in the ratio of 7 : 5 : 3. P retires and it is decided that profit-sharing ratio between Q and R will be same as existing between P and Q. Calculate New profit-sharing ratio and Gaining Ratio.

Answer 1

New profit-sharing ratio and Gaining Ratio are calculated below:

Explanation:

Given,

P, Q and R are partners who are sharing profits in the ratio of 7 : 5 : 3.

P: Q: R=7: 5: 3 (Old Ratio)

After P's retirement, it is decided that profit-sharing ratio between Q and R will be same as existing between P and Q.

Q : R =7: 5 (New Ratio)

Calculation of Gaining Ratio:

Calculation of Gaining Ratio is done using the below formula

Gaining Ratio = New Ratio - Old Ratio

$Q's=\frac{7}{12}-\frac{5}{15}=\frac{35}{60}-\frac{20}{60}=\frac{15}{60}$

$R's=\frac{5}{12}-\frac{3}{15}=\frac{25}{60}-\frac{12}{60}=\frac{13}{60}$

New Ganing Ratio (Q and R) = 15:13

Thus, the New profit-sharing ratio and Gaining Ratio will be 15 : 13