4 :- X, Y and Z are partners sharing profits in the ratio of 1/2, 3/10 and 1/5. Calculate the gaining ratio of remaining partners when Y retires from the firm.
Solution:-
Old ratio = 5:3:2
Y retires from the firm
(a) Calculation of new profit sharing ratio of X and Z
X’s new share = 5/10 + (3/10 x 5/7) = 5/10 + 15/70 = 50/70
Z’s new share = 2/10 + (3/10 x 2/7) = 2/10 + 6/70 = 20/70
Thus, their new ratio is 5:2
(b) Calculation of their gaining ratio
New ratio – old ratio
X = 5/7 – 5/10 = 15/70
Z = 2/7 – 2/10 = 6/70
Therefore, gaining ratio of X and Z is 5:2