Question

X and Y were partners in a firm sharing profits in the ratio of 5 : 3. With effect from 1st April, 2023 they agreed to share profits equally. Calculate the individual partner's gain or sacrifice due to change in ratio.

Answer 1

Sacrifice/Gain Share = Old Share − New Share

Positive result (+) = Sacrifice

Negative result (−) = Gain

X's Share:

`5/8 - 1/2 = (5 - 4)/8 = +1/8 "(Sacrifice)"`

Y's Share:

`3/8 - 1/2 = (3 - 4)/8 = -1/8 "(Gain)"`

X sacrifices `1/8` of his share

Y gains `1/8` of his share