Question

X, Y and Z are sharing profits and losses in the ratio of 5 : 3 : 2. With effect from 1st April, 2019, they decide to share profits and losses equally. Calculate each partner's gain or sacrifice due to the change in ratio.

Answer 1

Old Ratio (X, Y and Z) = 5 : 3 : 2

New Ratio (X, Y and Z) = 1 : 1 : 1

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

X's share = `5/10 - 1/3 = (15-10)/30 = 5/30` (sacrifice)

Y's share = `3/10 - 1/3 = (9-10)/30 = (-1)/30` (gain)

Z's share = `2/10 - 1/3 = (6-10)/30 = (-4)/30` (gain)

∴ Y’s Gain = 1/30

Z’s Gain = 4/30

X’s Sacrifice = 5/30