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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.
Numerical
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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
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