Question

From the following particulars, calculate new profit-sharing ratio of the partners:
(a) Shiv, Mohan and Hari were partners in a firm sharing profits in the ratio of 5 : 5 : 4. Mohan retired and his share was divided equally between Shiv and Hari.
(b) P, Q and R were partners sharing profits in the ratio of 5 : 4 : 1. P retires from the firm.

Answer 1

(a)

Old Ratio (Shiv, Mohan and Hari) = 5 : 5 : 4

Mohan’s Profit Share = `5/14`

His share is divided between Shiv and Hari equally i.e. in the ratio of `1 : 1`

`"Share of mohan taken by shiv" = 5/14 xx 1/2 = 5/28`

`"Share of Mohan taken by Hari" = 5/14 xx 1/2 = 5/28`

New Profit Share = Old Profit Share  +  Share taken from Mohan

`"Shiv's New Share" = 5/14 + 5/28 = 10+5/28 = 15/28`

`"Hari's New Share "= 4/14 + 5/28 = 8+5/28 = 13/28`

∴ New Profit Ratio (Shiv and Hari) = 15 : 13

(b)

Old Ratio (P, Q and R) = `5 : 4 : 1`

P’s Profit Share = `5/10`

As we can see, no information is given as to how Q and R are acquiring P's profit share after his retirement, so the new profit sharing ratio between Q and R is calculated just by crossing out the P’s share. That is, the new ratio becomes `4 : 1`

∴New Profit Ratio (Q and R) = `4 : 1`