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in Reconstitution of a Partnership Firm – Retirement/Death of a Partner by (25.6k points)
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A, B and C were partners sharing profits in the ratio of 3: 5: 7. C retires and his share is taken up by A and B in the ratio of 3: 2. Find out the new profit sharing and gaining ratio of A and B.

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New share = Old share + Gain

A B C
Old ratio \(\frac{3}{15}\) \(\frac{5}{15}\) \(\frac{7}{15}\)

A’s gain is 3/5 of 7/15 = 21/75 

B’s gain is 2/5 of 7/15 = 14/75

A's New share = \(\cfrac{3}{15} + \cfrac{21}{75} = \cfrac{15+21}{75} = \cfrac{36}{75}\)

B's New share = \(\cfrac{5}{15}\) + \(\cfrac{14}{75}\) = \(\cfrac{25+14}{75}\) = \(\cfrac{39}{75}\)

New ratio between A and B = \(\cfrac{36}{75} : \cfrac{39}{75}\)

= 36 : 39 or 12 : 13

Gaining ratio is the proportion in which they have acquired C’s share of profit, i.e., 3 : 2. This can be checked by working out in the following way.

Gaining ratio = New share – old share

A's gain = \(\cfrac{12}{25}- \cfrac{3}{15} = \cfrac{720-30}{150} = \cfrac{420}{150}\)

B's gain = \(\cfrac{13}{25} - \cfrac{5}{15} - \cfrac{78-50}{150} = \cfrac{28}{150}\)

Gaining ratio of A and B = \(\cfrac{42}{150} : \cfrac{25}{150}\)

or 42 : 28 or 3 : 2

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