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A And B Are Sharing Profits and Losses Equally. with Effect from 1st April, 2019, They Agree to Share Profits in the Ratio of 4 : 3. - CBSE (Arts) Class 12 - Accountancy

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Question

A and B are sharing profits and losses equally. With effect from 1st April, 2019, they agree to share profits in the ratio of 4 : 3. Calculate individual partner's gain or sacrifice due to the change in ratio.

Solution

Old Ratio (A and B) = 1 : 1

New Ratio (A and B) = 4 : 3

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

A's share = `1/2 - 4/7 = (7-8)/14 = (-1)/14` (Gain)

B's share = `1/2 - 3/7 = (7-6)/14 = 1/14` (sacrifice)

∴ A’s Gain = 1/14

B’s Sacrifice = 1/14

  Is there an error in this question or solution?

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Solution A And B Are Sharing Profits and Losses Equally. with Effect from 1st April, 2019, They Agree to Share Profits in the Ratio of 4 : 3. Concept: Retirement and Death of a Partner - Sacrificing Ratio.
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