, , and are partners with an equal profit sharing ratio (). Their fixed capitals are , and respectively. decides to retire. and decide to continue the partnership firm and change their new profit sharing ratio into their respective Capital Ratio. What is the gaining ratio of and ?
- A
- B
- C
- D
Solution & Step-by-step Explanation
Let's calculate the gaining ratio systematically:Old Profit Sharing Ratio:
New Profit Sharing Ratio: and adopt their Capital Ratio.
Gaining Ratio Formula: For A:
For B:
New Profit Sharing Ratio: and adopt their Capital Ratio.
Gaining Ratio Formula: For A:
For B: