Topic: New Profit Sharing Ratio & Gaining Ratio
🔷 Q1.22:10 12-08-2025
A, B and C were sharing profits in the ratio 5:3:2. C retires. A and B decide to share profits in
the ratio 3:2.
Calculate the new profit-sharing ratio and gaining ratio.
🔷 Q2.
X, Y and Z are partners sharing profits in the ratio 4:4:2. Z retires and his share is taken
equally by X and Y.
Find the new ratio and gaining ratio.
🔷 Q3.
P, Q and R are sharing profits in 3:3:2. R retires. P and Q gain R’s share in the ratio 2:1.
Find the new ratio and gaining ratio.
🔷 Q4.
M, N and O share profits in the ratio 6:5:4. O retires and his share is taken by M and N in the
ratio 1:2.
Calculate new profit-sharing ratio.
🔷 Q5.
A, B and C are partners in a firm. Their profit-sharing ratio is 2:2:1. C retires and his share is
taken by A and B equally.
Find the new profit-sharing ratio and gaining ratio.
🔷 Q6.
Ram, Mohan and Sohan are partners sharing profits in the ratio 7:5:4. Sohan retires. Ram
and Mohan agree to share future profits in the ratio 3:2.
Calculate gaining ratio.
🔷 Q7.
X, Y and Z share profits in the ratio 4:3:2. Z retires and X and Y decide to share equally in
future.
Find new ratio and gaining ratio.
🔷 Q8.
A, B and C share profits in the ratio 3:3:2. C retires. A and B agree to share the future profits
in 5:3.
Calculate new profit-sharing ratio and gaining ratio.
🔷 Q9.
R, S and T share profits in the ratio 1:1:1. T retires. R and S decide to continue in the same
ratio as before.
Find the new ratio and gaining ratio.
🔷 Q10.
P, Q and R are partners in the ratio 3:2:1. R retires. P and Q share R’s share in the ratio 4:1.
Calculate the new profit-sharing ratio.
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Perfect, Moonie! 🌙
Here are the detailed answers with workings for all 10 CBSE-style questions on New Profit-
Sharing Ratio & Gaining Ratio from the Retirement chapter. 💯📘
✅ Q1.
Old Ratio (A:B:C) = 5:3:2
C retires. New ratio of A:B = 3:2
A (Old) = 5/10, A (New) = 3/5 = 6/10 ⇒ Gain = 6/10 - 5/10 = 1/10
B (Old) = 3/10, B (New) = 2/5 = 4/10 ⇒ Gain = 4/10 - 3/10 = 1/10
New Ratio = 3:2, Gaining Ratio = 1:1
✅ Q2.
Old Ratio = 4:4:2 = X:Y:Z
Z retires. Z's share (2/10) is taken equally by X and Y ⇒ each gets 1/10
X (Old) = 4/10 → New = 4/10 + 1/10 = 5/10
Y (Old) = 4/10 → New = 4/10 + 1/10 = 5/10
New Ratio = 1:1, Gaining Ratio = 1:1
✅ Q3.
Old Ratio = 3:3:2
R retires. P and Q gain R's share (2/8) in 2:1
So, P gets 4/12 of 2/8 = 4/12 × 2/8 = 8/96 = 1/12
Q gets 2/12 × 2/8 = 4/96 = 1/24
Old Ratios:
P = 3/8 → New = 3/8 + 1/12 = (9+2)/24 = 11/24
Q = 3/8 + 1/24 = (9+1)/24 = 10/24
New Ratio = 11:10, Gaining Ratio = 2:1
✅ Q4.
Old Ratio = M:N:O = 6:5:4
O retires. His 4/15 share is taken in 1:2 ratio
M gets = 1/3 × 4/15 = 4/45
N gets = 2/3 × 4/15 = 8/45
New:
M = 6/15 + 4/45 = (18+4)/45 = 22/45
N = 5/15 + 8/45 = (15+8)/45 = 23/45
New Ratio = 22:23, Gaining Ratio = 4:8 = 1:2
✅ Q5.
Old = A:B:C = 2:2:1
C retires. His share = 1/5, taken equally by A and B ⇒ each gets 1/10
A = 2/5 + 1/10 = 5/10 = 1/2
B = 2/5 + 1/10 = 5/10 = 1/2
New Ratio = 1:1, Gaining Ratio = 1:1
✅ Q6.
Old = 7:5:4 → Total = 16
Sohan retires (4/16)
New Ratio = Ram:Mohan = 3:2 = 3/5:2/5
New:
Ram = 3/5 = 9.6/16 = approx. 24/40
Mohan = 2/5 = 6.4/16 = 16/40
Old:
Ram = 7/16 → Gain = 24/40 – 17.5/40 = 6.5/40
Mohan = 5/16 → Gain = 16/40 – 12.5/40 = 3.5/40
Gaining Ratio = 6.5:3.5 = 13:7
✅ Q7.
Old = 4:3:2 (Z retires)
New = X:Y = 1:1 = 5:5 = 10/20 each
Old:
X = 4/9 → New = 1/2 = 9/18 = 0.5
Convert both to same denominator:
X: Old = 4/9 = 8/18; New = 9/18 ⇒ Gain = 1/18
Y: Old = 3/9 = 6/18; New = 9/18 ⇒ Gain = 3/18
Gaining Ratio = 1:3
✅ Q8.
Old = 3:3:2 (C retires)
New = A:B = 5:3 = 8 parts
A:
Old = 3/8
New = 5/8 ⇒ Gain = 2/8 = 1/4
B:
Old = 3/8
New = 3/8 ⇒ Gain = 0
New Ratio = 5:3, Gaining Ratio = 1:0 ⇒ Only A gains
✅ Q9.
Old = 1:1:1
T retires. R and S share equally again (1:1)
Old:
R = 1/3 → New = 1/2 ⇒ Gain = 1/6
S = 1/3 → New = 1/2 ⇒ Gain = 1/6
Gaining Ratio = 1:1
✅ Q10.
Old = 3:2:1
R retires → R’s share = 1/6
P and Q share this in 4:1
P gets = 4/5 × 1/6 = 4/30 = 2/15
Q gets = 1/5 × 1/6 = 1/30
P = 3/6 + 2/15 = (15 + 4)/30 = 19/30
Q = 2/6 + 1/30 = (10 + 1)/30 = 11/30
New Ratio = 19:11, Gaining Ratio = 4:1
✅ TOPIC: Retirement – NPSR & Gaining Ratio
📌 Must-Know Rules, Tips, and Tricks
1️⃣ Always Start with the Old Ratio
Even if question seems tricky, always write the old ratio clearly.
Remember to convert to fractions like 3:2:1 = 3/6, 2/6, 1/6.
2️⃣ Check if New Ratio is Given
✅ If YES:
Use formula:
Gaining Ratio
New Ratio
Old Ratio
Gaining Ratio=New Ratio−Old Ratio
❌ If NO:
Then assume:
Gaining Ratio = New Ratio
Gaining Ratio = New Ratio
And distribute the retiring partner’s share in gaining ratio.
3️⃣ Gaining Ratio is Only for Continuing Partners
Never include the retired partner in new or gaining ratio.
Gaining ratio = how much of the retired partner’s share each remaining partner is taking.
4️⃣ Always Cross-Multiply for Equal Distribution
If partners share equally or in given ratio, make LCM of denominators and adjust to same
base.
5️⃣ New Ratio = Old Share + Gained Share
For each remaining partner:
New Share
Old Share
Part of Retired Partner’s Share
New Share=Old Share+Part of Retired Partner’s Share
6️⃣ Gaining Ratio is Used For:
Goodwill adjustment
Compensation to retiring partner
Journal Entries for Premium for Goodwill
7️⃣ Common Mistakes to Avoid:
🚫 Don’t forget to check if new ratio is given.
🚫 Don’t mix up gaining and sacrificing ratio (sacrificing is for admission).
🚫 Don’t include retired partner in new or gaining ratio.
🧠 Pro Tip:
If you’re stuck — always draw a table like this:
Partner Old Share New Share Gain
A 3/6 4/6 +1/6
B 2/6 2/6 0
This makes it very easy to find new ratio and gaining ratio!
📌 Special Conditions to Remember
✅ 1. No New Ratio Given = Gaining Ratio is Assumed
If question says:
"A, B and C were sharing 3:2:1. C retires."
...but no new ratio is mentioned, then:
Retiring partner’s share is assumed to be taken by continuing partners in their old ratio.
Retiring partner’s share is assumed to be taken by continuing partners in their old ratio.
Then:
Gaining Ratio = Old Ratio of Continuing Partners
Gaining Ratio = Old Ratio of Continuing Partners
New Ratio = Old share + Gained share
✅ 2. Retiring Partner's Share Taken Unequally
Sometimes, the question says:
“C retires. His share is taken by A and B in 3:2.”
This is important! You must distribute C’s share (say 1/6) in 3:2:
A gets:
30
5
3
30
B gets:
25 × 16=2302
30
Then add to their old shares to find the new ratio.
✅ 3. Equal Sharing After Retirement
If question says:
“After retirement, A and B decided to share equally.”
→ Then New Ratio = 1:1
Then use:
Gaining Ratio = New – Old
Gaining Ratio = New – Old
✅ 4. Old Ratio Already in Fraction/Decimals
Some questions directly give:
“Partners were sharing as 1/2, 1/3, and 1/6. One retires.”
You should:
Convert all to LCM base (here, 6):
→ 3/6, 2/6, 1/6
Then proceed like usual.
✅ 5. Hidden Ratios / Percentage Sharing
Some CBSE questions may say:
“A gets 40%, B gets 30%, and C gets 30% of profits.”
→ Convert these to fractions: 40/100, 30/100, etc. = 4:3:3
Then solve just like you would with normal ratios.
✅ 6. Old + New Ratio = Cross-check
Always make sure:
\text{Sum of New Ratios = 1 (or 100%)}
If it doesn’t, you’ve probably made a mistake in gaining ratio or addition.
✅ 7. Retired Partner’s Share Not Given Directly
If the retired partner’s share is not obvious, find it by:
Retired partner’s share = 1 – (Sum of new ratios)
Retired partner’s share = 1 – (Sum of new ratios)
Example:
If New Ratio of A and B = 7:5 = 12 parts
Then Retired partner = 1 – (12/12) = 0 ❌ (doesn’t make sense)
So you must check the old ratio again and calculate correctly.