CBSE Class 12-commerce Answered
When no agreement exists between the continuing partners with respect to sharing of the retiring partner's share in profit, it is assumed that after the retirement of a partner, the remaining partners will continue to share profits in the ratio which existed among them before the retirement of the partner. In such situation, continuing partners gain share of the outgoing partner in the old profit sharing ratio. Therefore, profit sharing ratio of the remaining partners is their gaining ratio.
In the given question also, since, there is no agreement with respect to the sharing of retiring partner's share, the continuing partners X and Z will gain share of the outgoing partner in the old profit sharing ratio i.e, 5:2(WN). In this case, Profit sharing ratio of the remaining partners is their gaining ratio which is 5:2.
WN: Old Profit Sharing Ratio:
X = 1/2 x 5/5 = 5/10
Y = 3/10 = 3/10
Z = 1/5 x 2/2 = 2/10
i.e., Old PSR between X, Y & Z is 5:3:2 and that between X and Z after Y's retirement is 5:2