## 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.

SOLUTION

(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 × 1/2 = 5/28
Share of mohan taken by Hari = 5/14 × 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