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A and B share profits in the ratio 4:1. When C is admitted as a partner, the new profit-sharing ratio becomes 2:2:1. What is A’s sacrificing ratio?

Answer and explanation

Correct answer: 2/5

A’s old profit share was 4/5, while his new share in the ratio 2:2:1 is 2/5. Therefore, A’s sacrifice = old share − new share = 4/5 − 2/5 = 2/5. Exam tip: For an existing partner, calculate sacrifice by subtracting the new share from the old share.

Related tags

GoodwillAdmission Of PartnerSacrificing RatioPartnership AccountsPartnership Accounts Basic ConceptsAccountancyClass 12 Mcq

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