Arjun, Vasisht and Keshav were partners in a business sharing profits equally. Vasisht retires on 31^st March 2022 when the Balance sheet stood as follows:

Balance Sheet as at 31^st March 2022

Additional information:

1. Arjun and Keshav decided to share future profits in the ratio of 3 : 2
2. Value of Land and Building appreciated by 12%
3. Value of Goodwill of the firm ₹37,500.
4. A provision for doubtful debts is maintained @ 8%
5. Inventory includes an item of ₹450 which has become obsolete

On the basis of the following information answer the question.

Calculate gaining ratio of remaining partners.

4 : 1

The correct answer is Option (3) - 4 : 1.

Old ratio = 1:1:1 (Arjun, Vasisht and Keshav)
Vasisht retires
New ratio = 3:2 (Arjun and Keshav)

Gain of Arjun = 3/5 - 1/3
                    = (9-5)/15
                    = 4/15

Gain of Keshav = 2/5 - 1/3
                      = (6-5)/15
                      = 1/15

Gaining ratio = 4/15:1/15
                    = 4:1