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A and B share profits in (2:3). C is admitted and new ratio is (4:5:3). What is sacrificing ratio?

Answer and explanation

Correct answer: (4:11)

The governing concept is the sacrificing ratio, which measures the share of profit surrendered by each old partner when a new partner is admitted. Use a common denominator. A’s old share is 2/5 = 24/60, while B’s old share is 3/5 = 36/60. The new ratio 4:5:3 totals 12, so A’s new share is 4/12 = 20/60 and B’s new share is 5/12 = 25/60. Therefore, A sacrifices 24/60 − 20/60 = 4/60, and B sacrifices 36/60 − 25/60 = 11/60. Their sacrificing ratio is consequently 4:11. Thus option A is correct. Option B merely repeats the old ratio, option C assumes equal sacrifice without calculation, and option D reverses the order of A’s and B’s sacrifices.

Related tags

Sacrificing RatioPartner AdmissionGoodwillAccountancyGoodwill AccountingReconstitution Admission Of A PartnerClass 12 Mcq

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