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Calculate New Profit-sharing Ratio and Sacrificing Ratio. - Accountancy

Sum

Kabir and Farid are partners in a firm sharing profits and losses in the ratio of 7 : 3. Kabir surrenders 2/10th from his share and Farid surrenders 1/10th from his share in favour of Jyoti; the new partner. Calculate new profit-sharing ratio and sacrificing ratio.

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Solution

Calculation of New Ratio : 
Old Ratio of Kabir and Farid 7 : 3
Kabir sacrifices his share of profit in favour of Jyoti = `2/10`

Farid sacrifices his share of profit in favour of Jyoti = `1/10`

Jyoti's Share = `2/10 + 1/10 = 3/10`
New Ratio = Old Share − Share Sacrificed

Kabir's New Share = `7/10 - 2/10 = 5/10`

Farid New Share = `3/10 - 1/10 = 2/10`

New Profit Sharing Ratio = 5 : 2 : 3

Calculation of Sacrificing Ratio
Since, Kabir and Farid are sacrificing 2/10 share and 1/10 share respectively, therefore the sacrificing ratio becomes 2 : 1

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 5 Admission of a Partner
Exercise | Q 8 | Page 86
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