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Question
P, Q, R and S were partners sharing profits in the ratio of 5 : 4 : 3 : 1. P and S retire from the firm. Calculate the gaining ratio and new profit sharing ratio of Q and R.
Numerical
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Solution
Old ratio = P : Q : R : S = 5 : 4 : 3 : 1
P and S retire. Therefore, Q and R continue with their old shares.
Gaining Ratio
Q : R = 4 : 3
New Profit-Sharing Ratio
Q : R = 4 : 3
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Chapter 4: Retirement or Death of a Partner - PRACTICAL QUESTIONS [Page 4.103]
