Question : Partners P, Q, and R split earnings in the following proportions: 7: 5: 3. When P retires, it is decided that Q and R will share profits at the same ratio as P and Q did. Calculate the Gaining Ratio and the New Profit-Sharing Ratio.
Option 1: New Ratio between Q and R is 7 : 5
Gaining Ratio between Q and R is 8 :7
Option 2: New Ratio between Q and R is 2 : 3
Gaining Ratio between Q and R is 13 : 15
Option 3: New Ratio between Q and R is 7 : 5
Gaining Ratio between Q and R is 15 : 18
Option 4: None of the Above
Correct Answer: New Ratio between Q and R is 7 : 5
Gaining Ratio between Q and R is 15 : 18
Solution :
Calculation of Gaining Ratio
P : Q : R =7 : 5 : 3(Old ratio)
Q : R = 7 : 5 (New ratio,
same as between P & Q)
Q's Gain = 7/12 - 5/15 = (35 - 20)/60 = 15/60
R's Gain = 5/10 - 3/15 = (30 - 12)/60 = 18/60
Q : R = 15 : 18
Hence the correct answer is option 3.
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