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A and B share profits in the ratio 3:2. C is admitted as a partner for a 1/5 share of profits. A sacrifices a 1/10 share of profits in favour of C. What will be the sacrificing ratio of A and B?

Answer and explanation

Correct answer: 1:1

C receives a total profit share of 1/5, so the combined sacrifice of A and B must also be 1/5. Since A sacrifices 1/10, B’s sacrifice is 1/5 − 1/10 = 1/10. Therefore, the sacrificing ratio is 1/10 : 1/10 = 1:1. Exam tip: the new partner’s share equals the total sacrifice made by the old partners.

Related tags

Admission Of PartnerSacrificing RatioProfit Sharing RatioReconstitutionNew Profit Sharing RatioReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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