Question

Ishan, Jatin and Kapil were partners in a firm sharing profits and losses in the ratio of 5:4:1. Jatin retired and his share was taken up by Ishan and Kapil in the ratio 1:1. The new profit-sharing ratio between Ishan and Kapil after Jatin's retirement will be:

• A. 5:1
• B. 1:1
• C. 5:4
• D. 7:3

Hint:

When a retiring partner's share is taken by remaining partners in a specific ratio, first calculate the actual fraction of profit gained by each remaining partner. Then, add this gained share to their respective old shares to find the new profit-sharing ratio. New Share = Old Share + Gained Share.

Answer 1

The Correct Option is D

To establish the new profit-sharing ratio for Ishan and Kapil post-Jatin's retirement, adhere to the subsequent procedure:

1. The initial profit-sharing ratio for Ishan, Jatin, and Kapil is 5:4:1.
2. Jatin's entitlement represents 4/10 of the aggregate profit.
3. Following Jatin's departure, his 4/10 share is distributed equally between Ishan and Kapil, with each receiving half of Jatin's portion.
4. Determine Ishan's updated share:
   • Initial share: 5/10
   • Acquired from Jatin: 2/10
   • Revised total share: 5/10 + 2/10 = 7/10
5. Ascertain Kapil's updated share:
   • Initial share: 1/10
   • Acquired from Jatin: 2/10
   • Revised total share: 1/10 + 2/10 = 3/10
6. Consequently, the new profit-sharing ratio between Ishan and Kapil is established as 7:3.