Question

From the following particulars, calculate New Profit-sharing Ratio of the partners:

1. Shiv, Mohan and Hari were partners in a firm sharing profits in the ratio of 5 : 5 : 4. Mohan died and his share was taken equally by Shiv and Hari.
2. P, Q and R were partners sharing profits in the ratio of 5 : 4 : 1. P died.

Answer 1

(a) The old ratio is 5 : 5 : 4

Shiv’s Share = `5/14`

Mohan’s Share = `5/14`

Hari’s Share = `4/14`

Mohan dies, and his share`(5/14)` is taken equally (1 : 1) by Shiv and Hari.

Shiv’s Gain = `5/14 xx 1/2 = 5/28`

Hari’s Share = `5/14 xx 1/2 = 5/28`

Shiv’s New Share = Old Share + Gain

= `(5 xx 2)/(14 xx 2) + 5/28`

= `10/28 + 5/28`

= `15/28`

Hari’s New Share = Old Share + Gain

= `(4 xx 2)/(14 xx 2) + 5/28`

= `8/28 + 5/28`

= `13/28`

The new profit-sharing ratio between Shiv and Hari is 15 : 13

(b) The old ratio is 5 : 4 : 1, which means:

P’s Share = `5/10`

Q’s Share = `4/10`

R’s Share = `1/10`

P dies. Since there is no information on how P’s share is acquired, it is assumed that the remaining partners (Q and R) take it in their original relative proportions.

∴ New Profit Ratio (Q and R) = 4 : 1