Sharma, Verma and Neetu were partners sharing profits and losses in proportion of $\frac{1}{4}, \frac{1}{8}$ and $\frac{10}{16} .$ Calculate the new profit sharing ratio between continuing partners if,

(a) Sharma retires, (b) Verma retires, (c) Neetu retires. Also calculate their gaining ratio in each of the above situation.

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Solution

The ratio of Sharma, Verma and Neetu is $\frac{1}{4} : \frac{1}{8} : \frac{10}{16} .$ This can be written as $\frac{4 : 2 : 10}{16} o r 2 : 1 : 5.$

Since the new profit sharing ratio of the remaining partners is not given in the question, it will be assumed that the remaining partners have gained in their old ratio.

(a) When Sharma retires, the gaining ratio between Verma and Neetu is 1 : 5.

(b) When Verma retires, the gaining ratio between Sharma and Neetu is 2 : 5.

(c) When Neetu retires, the gaining ratio between Sharma and Verma is 2 : 1.

New ratio of the remaining partners will be calculated by striking out the share of the retiring partner. Thus,

(a) When Sharma retires, the new ratio between Verma and Neetu is 1 : 5.

(b) When Verma retires, the new ratio between Sharma and Neetu is 2 : 5.

(c) When Neetu retires, the new ratio between Sharma and Verma is 2 : 1.

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