Partnership

Retirement/Death

Easy

common

Gaining share of Continuing Partner =

Old share - New share

New share + old share

New share – Old share

Old Share + Sacrifice share

✅ Correct Option: 3

When there's a change in the profit-sharing ratio of a partnership firm (due to retirement, admission, or change in ratio), partners either gain or sacrifice their share.

A continuing partner gains when their share in profits increases from the old arrangement to the new arrangement.

Formula:

Gaining Share = New Share - Old Share

Understanding the logic:

If the new share is greater than the old share, the difference represents what the partner has gained.

For example:

A partner's old share = $\frac{2}{5}$
A partner's new share = $\frac{3}{5}$
Gaining share = $\frac{3}{5} - \frac{2}{5} = \frac{1}{5}$

The partner has gained $\frac{1}{5}$ share in the profits.

Note: If New Share < Old Share, the result would be negative, indicating the partner is sacrificing rather than gaining. In such cases, the Sacrificing Share = Old Share - New Share (to express it as a positive value).

The correct option is Option 3: New share – Old share

2025: 15 May Shift 1

Various accounting aspects involved on death of a partner are as follows:

(A) Adjustment in respect of unrecorded assets and liabilities

(B) Treatment of goodwill

(D) Preparation of Executor's loan A/c

Choose the correct answer from the options given below:

2026: 11 May Shift 1

The following is the extract from the balance sheet of the firm with A, B and C as partners as on 31st march 2025.

Creditors	Rs. 10,000
Machinery	Rs. 20,000
Stock	Rs. 12,000
Building	Rs. 55,000

C retired from the firm and the following are the adjustments related to revaluation :

i. Stock to be valued at 92% of its book value.

ii. Value of building is to be appreciated by 20%.

iii. Creditors of Rs 2,000 are no longer payable.

Choose which of the following statements is true:

A. Stock A/c of Rs 960 is to be shown on the debit side of the revaluation account.

B. Stock A/c of Rs 960 is to be shown on the credit side of the revaluation account.

C. Creditors A/c of Rs 2,000 is to be shown on the credit side of the revaluation account.

D. Creditors A/c of Rs 2,000 is to be shown on the debit side of the revaluation account.

Choose the correct answer from the options given below:

2025: 13 May Shift 1

The old Profit Sharing ratio among M, N and P are 2:2:1. The New profit sharing ratio after N retirement is 3:2. The gaining ratio between M and P will be:

2026: 19 May Shift 1

Manav, Nath and Narayan were partners in a firm sharing profits in the ratio of 1 : 2 : 1. The firm closes its books on 31st March every year. On 30th September, 2025 Nath died.

Match List-I with List-II

List-I	List-II
(A) There was a debit balance of Rs 30,000 in the profit and loss account.	(I) Nath's Capital A/c will be debited by Rs. 5100
(B) Nath's share of profit/loss in the year of his death was to be calculated on the basis of average profit/loss of last 5 years, the average loss is Rs 90,000.	(II) Nath's Capital A/c will be debited by Rs. 15000
(C) There was a Goodwill appearing in the books for Rs. 25000.	(III) Nath's Capital A/c will be debited by Rs. 12500
(D) There was a drawing of Nath of Rs 85000 on which interest is to be charged at 12%.	(IV) Nath's Capital A/c will be debited by Rs. 22,500

Choose the correct answer from the options given below:

2025: 16 May Shift 1

Gaining Ratio is not calculated at the______.

2026: 20 May Shift 1

A, B and C were partners in a firm sharing profits and losses in the ratio of 5:4:1. B died on June 30, 2025. The profit for the previous three years were Rs 68,000 (For 2022-23), Rs 77,000 (For 2023-24), Rs 50,000 (2024-25) while the sales during the year 2024-25 were Rs. 4,00,000 and the sales from April 1, 2025 to June 30, 2025 were Rs. 75,000. Find the profits that the firm must have earned from the date of closing of last year's balance sheet till the date of death of B.

Gaining share of Continuing Partner =

Solution

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