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Question
What is sacrificing ratio?
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Solution
Sacrificing ratio is the proportion of the profit which is sacrificed or foregone by the old partners in favour of the new partner. The purpose of finding the sacrificing ratio is to share the goodwill brought in by the new partner.
Sacrifice Ratio = Old share – New share
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RELATED QUESTIONS
If the old profit sharing ratio is more than the new profit sharing ratio of a partner, the difference is called ____________.
Match List I with List II and select the correct answer using the codes given below:
| List I | List II |
| (i) Sacrificing ratio | 1. Investment fluctuation fund |
| (ii) Old profit sharing ratio | 2. Accumulated profit |
| (iii) Revaluation Account | 3. Goodwill |
| (iv) Capital Account | 4. Unrecorded liability |
James and Kamal are sharing profits and losses in the ratio of 5 : 3. They admit Sunil as a partner giving him 1/5 share of profits. Find out the sacrificing ratio.
Ananth and Suman are partners sharing profits and losses in the ratio of 3 : 2. They admit Saran for 1/5 share, which he acquires entirely from Ananth. Find out the new profit sharing ratio and sacrificing ratio.
Raja and Ravi are partners, sharing profits in the ratio of 3 : 2. They admit Ram for 1/4 share of the profit. He takes 1/20 share from Raja and 4/20 from Ravi. Calculate the new profit sharing ratio and sacrificing ratio.
Vimala and Kamala are partners, sharing profits and losses in the ratio of 4 : 3. Vinitha enters into the partnership and she acquires 1/14 from Vimala and 1/14 from Kamala. Find out the new profit sharing ratio and sacrificing ratio.
Prema and Chandra share profits in the ratio of 5 : 3. Hema is admitted as a partner. Prema surrendered 1/8 of her share and Chandra surrendered 1/8 of her share in favour of Hema. Calculate the new profit sharing ratio and sacrificing ratio.
Selvam and Senthil are partners sharing profit in the ratio of 2 : 3. Siva is admitted into the firm with 1/5 share of profit. Siva acquires equally from Selvam and Senthil. Calculate the new profit sharing ratio and sacrificing ratio.
Mala and Anitha are partners, sharing profits and losses in the ratio of 3 : 2. Mercy is admitted into the partnership with 1/5 share in the profits. Calculate new profit sharing ratio and sacrificing ratio.
Ambika, Dharani and Padma are partners in a firm sharing profits in the ratio of 5 : 3 : 2. They admit Ramya for 25% profit. Calculate the new profit sharing ratio and sacrificing ratio.
