Sindhu, Neha, and Priya are partners sharing profits in the ratio of . If Neha retires from the firm, calculate the new profit-sharing ratio and the gaining ratio between Sindhu and Priya, assuming no other modifications are specified.
- ANew profit sharing Ratio = 1:2, Gaining Ratio = 3:2
- BNew profit sharing Ratio = 3:2, Gaining Ratio = 5:2
- CNew profit sharing Ratio = 5:2, Gaining Ratio = 5:2
- DNew profit sharing Ratio = 7:2, Gaining Ratio = 4:3
Solution & Step-by-step Explanation
The original ratio among Sindhu, Neha, and Priya is .When a partner retires and the agreement does not state how the remaining partners will acquire their share, the remaining partners continue sharing profits in their old relative proportions.New Profit-Sharing Ratio:Remove Neha's share () from the series. The remaining ratio between Sindhu and Priya is directly .Gaining Ratio:Under these baseline conditions, the gaining ratio matches their relative new profit-sharing ratio, which is also .