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A and B share profits in the ratio \(3:1\). C is admitted as a partner for a \(\frac{1}{4}\) share of profits. If A’s sacrifice is \(\frac{1}{8}\), what will be B’s sacrifice?

Answer and explanation

Correct answer: \(\frac{1}{8}\)

C’s incoming share is \(\frac{1}{4}\), so the total sacrifice made by A and B must also be \(\frac{1}{4}\). Therefore, B’s sacrifice = total sacrifice − A’s sacrifice = \(\frac{1}{4}-\frac{1}{8}=\frac{1}{8}\). Option C is incorrect because it would make the total sacrifice only \(\frac{3}{16}\). Exam tip: The incoming partner’s share equals the total sacrifice of the old partners.

Related tags

Admission Of PartnerSacrifice RatioNew Profit Sharing RatioPartnership AccountingClass 12Reconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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