Partnership

Retirement/Death

Easy

L, N and T are partners sharing profits in the ratio of 5:3:2. If N retires, the gaining ratio of L & T would be.......

3:2

5:2

5:3

2:3

✅ Correct Option: 2

When a partner retires and there's no specific agreement mentioned about how their share will be distributed, the continuing partners acquire the retiring partner's share in their existing ratio (the ratio in which they were sharing profits among themselves before retirement).

Initial profit sharing ratio:

L : N : T = 5 : 3 : 2

Ratio between continuing partners L and T:

L : T = 5 : 2

Since N is retiring and no specific information is given about redistribution of N's share, L and T will gain in their existing ratio of 5:2.

Gaining Ratio = 5:2

Note: The gaining ratio represents the ratio in which the continuing partners acquire the retiring partner's share. This is different from the new profit sharing ratio. Here, L and T gain N's 3 parts in the ratio of 5:2, meaning L gains $\frac{5}{7} \times 3 = \frac{15}{7}$ and T gains $\frac{2}{7} \times 3 = \frac{6}{7}$ of N's share.

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L, N and T are partners sharing profits in the ratio of 5:3:2. If N retires, the gaining ratio of L & T would be.......

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