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A and B share profits in the ratio 3:4. C is admitted for a 1/7 share, and A’s new profit share becomes 2/5. What is the sacrificing ratio of A and B?

Answer and explanation

Correct answer: 1:4

The old shares are A = 3/7 and B = 4/7. A’s sacrifice is 3/7 − 2/5 = 1/35. Since C receives 1/7 = 5/35, B’s sacrifice is 5/35 − 1/35 = 4/35. Therefore, A’s and B’s sacrificing ratio is 1/35 : 4/35 = 1:4. The ratio 3:4 is only the old profit-sharing ratio, not the sacrificing ratio. Exam tip: Sacrifice of an old partner = old share − new share.

Related tags

Admission Of PartnerSacrificing RatioNew Profit Sharing RatioPartnership AccountsReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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