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Old partners A and B share profits in the ratio 3:2, and the new ratio is 2:2:1. What is A’s sacrifice?

Answer and explanation

Correct answer: 1/5

The governing concept is sacrificing ratio on admission of a partner. A partner’s sacrifice is calculated as Old Share − New Share. A’s old share is 3/(3+2) = 3/5. Under the new ratio 2:2:1, the total parts are 5 and A receives 2/5. Therefore, A’s sacrifice is 3/5 − 2/5 = 1/5. Option A is correct. Option C is A’s new-share denominator error or old share rather than the sacrifice; option B results from an incorrect subtraction; and option D would be possible only if A’s share remained unchanged. Since A’s share falls by one-fifth, that amount is surrendered for the new arrangement.

Related tags

AdmissionNew Profit Sharing RatioSacrificing RatioReconstitutionAccountancyClass 12 McqNew Profit Sharing RatioReconstitution Admission Of A Partner

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