Question

X, Y, Z are equal partners in a firm. Z retires from the firm. The new profit sharing ratio between X and Y is $1:2$. Find the gaining ratio.

• A. $3:2$
• B. $2:1$
• C. $4:1$
• D. Only Y gains by $1/3$

Answer 1

Answer: (D)

Only Y gains by $1/3$

Old ratio (X, Y, and Z) = 1 : 1 : 1

New ratio (X and Z) = 1 : 2

Gaining ratio = New ratio - Old ratio

X's gain = (1/3) - (1/3) = Nil

Y's gain = (2/3) - (1/3) = 1/3

Therefore, only Y gains by 1/3