# A, B And C Are Partners Sharing Profits and Losses in the Ratio of 5 : 4 : 1. Calculate New Profit-sharing Ratio - Accountancy

Numerical

A, B and C are partners sharing profits and losses in the ratio of 5 : 4 : 1. Calculate new profit-sharing ratio, sacrificing ratio and gaining ratio in each of the following cases:
Case 1. C acquires 1/5th share from A.
Case 2. C acquires 1/5th share equally form A and B.
Case 3. A, B and C will share future profits and losses equally.
Case 4. C acquires 1/10th share of A and 1/2 share of B.

#### Solution

Calculation of new profit sharing ratio

Case 1:

A : B : C = 5 : 4 : 1 (Old ratio)

C aquires 1/5 "th" from A

A's sacrifice = 1/5

C's gain = 1/5

A = 5/10 - 1/5 = (5-2)/10 = 3/10

B = 4/10

C = 1/10 + 1/5 = (1=2)/10 = 3/10

A : B : C = 3 : 4 : 3

Case 2:

A : B : C = 5 : 4 : 1 (Old ratio)

C aquires 1/5 "th" share equally from A

A's sacrifice = 1/10

B's sacrifice = 1/10

C's gain = 1/5

A = 5/10 - 1/10 = (5-1)/10 = 4/10

B = 4/10 - 1/10 = (4-1)/10 = 3/10

C = 1/10 + 1/5 = (1+2)/10 = 3/10

A : B : C = 4 : 3 : 3

Case 3:

A : B : C = 5 : 4 : 1 (Old ratio)

A : B : C = 1 : 1 : 1 (New ratio)

A = 5/10 - 1/3 = (15-10)/30 = 5/30 (Sacrifice)

B = 4/10 - 1/3 = (12-10)/30 = 2/30 (sacrifice)

C = 1/10 - 1/3 = (3-10)/30 = -7/30 (gain)

Case 4:

A : B : C = 5 : 4 : 1 (Old ratio)

A's sacrifice to C = 5/10 xx 1/10 = 1/20

B's sacrifice to C = 4/10 xx 1/2 = 4/20

C's gain = 1/20 + 4/20 = 5/20

A = 5/10 - 1/20 = (10-1)/20 = 9/20

B = 4/10 - 4/20 = (8-4)/20 = 4/20

C = 1/10 + 5/10 = (2+5)/20 = 7/20

A : B : C = 9 : 4 : 7

Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio
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#### APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1
Chapter 4 Change in Profit-Sharing Ratio Among the Existing Partners
Exercise | Q 4 | Page 37