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

New profit-sharing ratio of the partners are given below:

Explanation:

(A)

Old ratio Shiv, Mohan and Hari = 5 : 5 : 4

Mohan's Profit share = $\frac{5}{14}$

Mohan's share is divided equally between Shiv and Hari in the ratio = 1 : 1

Calculation of Mohan's share taken by his partners

Mohan's share taken by Shiv

$=\frac{5}{14} \times \frac{1}{2}=\frac{5}{28}$

Mohan's share taken by Hari

$=\frac{5}{14} \times \frac{1}{2}=\frac{5}{28}$

New Profit Share = Old profit share + Mohan's Share taken by

Shiv's New share

$=\frac{5}{14}+\frac{5}{28}=\frac{10}{28}+\frac{5}{28}=\frac{15}{28}$

Hari's New share

$=\frac{4}{14}+\frac{5}{28}=\frac{8}{28}+\frac{5}{28}=\frac{13}{28}$

New Profit share Shiv and Hari

$=\frac{15:13}{28}=15:13$

(B)

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

P's profit share $=\frac{5}{10}$

Since, no information is given as to how Q and R are acquiring P's profit after his retirement, therefore the new profit sharing ratio between Q and R is calculated simply by crossing out P's share

New Profit Ratio (Q and R) = 4 : 1