Question

A and B are partners sharing profits and losses in the ratio of 5 : 3. On admission, C brings ₹ 70,000 as cash and ₹ 43,000 against Goodwill. New profit ratio between A, B and C is 7 : 5 : 4. The sacrificing ratio of A and B is ______.

Options

• 3 : 1

• 1 : 3

• 4 : 5

• 5 : 9

Answer 1

A and B are partners sharing profits and losses in the ratio of 5 : 3. On admission, C brings ₹ 70,000 as cash and ₹ 43,000 against Goodwill. New profit ratio between A, B and C is 7 : 5 : 4. The sacrificing ratio of A and B is 3 : 1.

Explanation:

Calculate the sacrificing ratio:

Sacrificing Share = Old Share − New Share

A’s Sacrifice = `5/8 - 7/16`

= `(5 xx 2)/(8 xx 2) - 7/16`

= `10/16 - 7/16`

= `3/16`

B’s Sacrifice = `3/8 - 5/16`

= `(3 xx 2)/(8 xx 2) - 5/16`

= `6/16 - 5/16`

= `1/16`

The sacrificing ratio of A and B = `3/16 : 1/16` or 3 : 1