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A and B are partners sharing profits and losses in the ratio of 4:1.They admit C into partnership and decide that the profit sharing ratio between B and C shall be same as between A and B. calculate New profit sharing ratio ane sacrificing ratio
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A and B are partners sharing profits and losses in the ratio of 4:1.Th...
Calculation of New Profit Sharing Ratio and Sacrificing Ratio

Given Data:


  • Partner A and B share profits and losses in the ratio of 4:1

  • They admit C into the partnership

  • B and C's profit sharing ratio same as A and B's



Solution:

Let us assume that the total profit earned by the partnership is 100 units.


Old Profit Sharing Ratio:


  • Partner A's share = (4/5) x 100 = 80 units

  • Partner B's share = (1/5) x 100 = 20 units



New Profit Sharing Ratio:


  • Partner A's share remains the same = 80 units

  • Partner B and C share profits in the ratio of 4:1

  • Thus, their total share = (4+1) parts = 5 parts

  • Partner B and C's share = (1/5) x 100 = 20 units

  • Thus, B's share = (4/5) x 20 = 16 units

  • And C's share = (1/5) x 20 = 4 units



Sacrificing Ratio:


  • B's sacrificing ratio = Old share - New share

  • B's sacrificing ratio = 20 - 16 = 4 units

  • A's sacrificing ratio = 0 units

  • C's gaining ratio = New share

  • C's gaining ratio = 4 units



Conclusion:

The new profit sharing ratio between A, B, and C is 80:16:4, and the sacrificing ratio of B is 4 units while the gaining ratio of C is 4 units.
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A and B are partners sharing profits and losses in the ratio of 4:1.Th...
16:4:1
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A and B are partners sharing profits and losses in the ratio of 4:1.They admit C into partnership and decide that the profit sharing ratio between B and C shall be same as between A and B. calculate New profit sharing ratio ane sacrificing ratio
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