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A and B share profits in the ratio 3:1. C is admitted for a 1/4 share of profits, and the new profit-sharing ratio becomes 2:1:1. Which statement correctly describes B’s sacrifice?

Answer and explanation

Correct answer: B made no sacrifice

Under the old ratio of 3:1, B’s share was 1/4. In the new ratio of 2:1:1, B’s share remains 1/4. Therefore, sacrifice = old share − new share = 1/4 − 1/4 = zero. Hence, B made no sacrifice; C’s 1/4 share is effectively adjusted from A’s reduced share. Exam tip: Calculate each partner’s sacrifice separately as old share minus new share.

Related tags

Sacrifice AnalysisNew Profit Sharing RatioAdmission Of PartnerPartnership AccountingReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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