M, N and S are partners in a firm sharing profit in the ratio of 2 :1: 1 N retires and M and S are decided that capital of the new firm will be fixed at ₹1,20,000. Calculate the new capital of remaining partners.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → M's capital ₹80,000, S's capital ₹40,000
On N’s retirement, M and S continue in their old ratio between themselves.
New ratio of M and S = 2 : 1
M’s new capital = ₹1,20,000 × 2/3 = ₹80,000
S’s new capital = ₹1,20,000 × 1/3 = ₹40,000
N has retired, so no capital is fixed for him in the new firm.
NCERT (2026-27 edition):
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