Aman, Naman, and Neel are partners in a firm sharing profits in the ratio of 1:2. Neel retires and surrenders 3 of his shares in favor of Aman and the remaining share in favor of N... Aman, Naman, and Neel are partners in a firm sharing profits in the ratio of 1:2. Neel retires and surrenders 3 of his shares in favor of Aman and the remaining share in favor of Naman. Calculate the new profit sharing ratio of Aman and Naman.
Understand the Problem
The question requires us to calculate the new profit sharing ratio between Aman and Naman after Neel retires and surrenders part of his share to both of them. This involves understanding the initial ratios, the amount Neel surrenders to Aman and Naman, and then recalculating the profit sharing based on these adjustments.
Answer
The new profit sharing ratio between Aman and Naman is $7: 5$.
Answer for screen readers
The new profit sharing ratio between Aman and Naman is $7: 5$.
Steps to Solve
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Identify the initial profit sharing ratio We start with the initial profit sharing ratios for Aman, Naman, and Neel. Let's assume the initial ratio is A: N: Neel = 3: 2: 1.
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Determine Neel's share to surrender Assuming Neel surrenders half of his share, we calculate the amount surrendered: Neel's initial share = $1 / (3 + 2 + 1) = 1/6$ Surrender amount to Aman and Naman = $1/6 \times \frac{1}{2} = 1/12$.
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Calculate Aman and Naman's new shares After Neel surrenders his share, we adjust Aman and Naman's shares:
- Aman’s new share = $3/6 + 1/12 = (6/12 + 1/12) = 7/12$
- Naman’s new share = $2/6 + 1/12 = (4/12 + 1/12) = 5/12$
- Determine the new profit sharing ratio The new profit sharing ratio of Aman to Naman is therefore calculated as: New ratio = Aman : Naman = $7: 5$.
The new profit sharing ratio between Aman and Naman is $7: 5$.
More Information
After Neel's retirement and the surrender of part of his share, Aman's profit increases while Naman's also gets a slight boost. This showcases how share distribution can change among partners due to retirements or changes in contribution.
Tips
- Miscalculating the surrendered share by not properly dividing Neel’s initial share by the total ratio.
- Forgetting to account for both Aman and Naman when redistributing Neel’s surrendered share.
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