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 M and S.

M's capital ₹80,000, S's capital ₹40,000

Old ratio between M, N & S = 2:1:1
N retires, So the New ratio between M & S = 2:1
Capital = ₹120000
This will be distributed between Remaining partners in their new ratio means 2:1
M's share = 120000 x 2/3
               = ₹80000
S's share = 120000 x 1/3
               = ₹40000