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

Answer and explanation

Correct answer: A and B = 1:1

To find sacrifice, compare each old partner’s old share with the new share. A’s old share is 5/9 and his new share is 4/9, so A sacrifices 1/9. B’s old share is 4/9 and his new share is 3/9, so B also sacrifices 1/9. Consequently, the sacrificing ratio is 1/9:1/9, or 1:1. Option A is therefore correct. Options B, C and D are inconsistent with the calculation because both A and B lose an equal portion of their original shares. C’s new share is 2/9, which equals the total sacrifice of 2/9, confirming that the comparison is internally consistent.

Related tags

GoodwillAdmissionSacrificing-RatioNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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