SOLUTION
Old Ratio (R, S and M) = 2: 2 : 1
M retires from the firm.
His profit share = 1/5
M’s share taken by R and S in ratio of 1 : 2
Share taken by R = 1/5 × 1/3 = 1/15
Share taken by S = 1/5 × 2/3 = 2/15
New Ratio = Old Ratio + Share acquired from M
R’s New Share = 2/5+1/15 = 6+1/15 = 7/15
S’s New Share = 2/5+2/15 = 6+2/15 = 8/15
∴ New Profit Ratio (R and S) = 7 : 8