Change in Profit Sharing Ratio Among the Existing Partners Video Lecture | Accountancy Class 12 - Commerce

first lest less let us understand the
change in the profit sharing ratio which
has already been discussed in detail in
the earlier module on partnership a
quick revision a quick revision with the
help of a couple of examples to
understand what happens here SR is equal
to o R minus n R we are saying the
sacrificing ratio is nothing but the old
ratio minus the new ratio old ratio the
ratio that the partners had before the
admission of the new partner that is the
old ratio then whether the new partner
comes in now there is a new ratio
amongst the partners this old ratio
minus the new ratio when that is
positive what we get is called the
sacrificing ratio if all ratio minus new
ratio in case in any situation on the
admission of a partner is negative it
would mean that there is a gaining ratio
what it would mean is that with the
admission of a new partner there has
been a reconstitution in such a manner
that one of the old partners also stands
to gain in future he is getting a
greater share of the profits in future
that is also possible
though usually more often when a partner
comes comes into the partnership is
admitted in finding partnership the old
partners sacrifice some share towards
the new partners to the new partner who
is coming so what is sacrificing ratio
the of the old ratio minus the new ratio
is the amount of sacrifice which is made
and the sacrificing ratio is actually
the ratio of this sacrifice which is
made let us take an example a and B are
equal partners C is admitted into the
partnership for 1/5 share what would be
the new ratio and what is thus
revising ratio so what was the old ratio
equal partners old ratio was therefore
half-and-half or this is a and B what is
the new ratio no since C is admitted for
1/5 C's share is 1/5 C's share is 1/5
what is the remaining share remaining
share is therefore 4/5 if nothing is
mentioned the profit sharing ratio among
the old partners will be the same as it
was before the admission of the park so
4/5 would be shared equally 4/5 half of
4/5 for by 10 or 2 by 5 and 2 by 5 would
be the new ratio of the old partners new
ratio of the old partners 2 by 5 and 2
by 5 I repeat the this entire discussion
has will be discussed in detail this
entire change in profit sharing ratio
sacrifice the gain etc has already been
discussed in our earlier module in
partnership nevertheless here C is
admitted for 1/5 share balance remaining
share is 4/5 the profit sharing ratio
among the old partners continues to be
the same between them if nothing is
mentioned
therefore 4/5 will now be shared equally
between a and B therefore that becomes
2/5 and 2/5 2/5 4 8 and 2/5 for me so
the new ratio is now 2 is to 2 is to 1 2
by 5 2 by 5 and 1 by 5 if we deduct what
does the sacrifice which is mean the
sacrifice which is made is
if we take a denominator of ten what are
we doing we are doing all ratio minus
new ratio so 1/2 minus 2 by 5 take 10
therefore we get 10 divided by 2 5 5
minus 5 10 divided by 5 2 2 into 2 4
that gives us 1 by 10 and 1 by 10 so the
sacrif a has sacrificed 1/10 of a share
via sacrificed one tenth of its share
1/10 plus 1/10 added up to 2 by 10 being
one fifth being the share of see
therefore what is the sacrificing ratio
the sacrificing ratio is one tenth is to
1/10 or one is to one it may be noted
that if the ratio between the old
partners has not changed between them
has not changed they were equal partners
before and even now their ratio is the
same 2 is 2 5 2 is 2 5 if this if the
ratio between the old partners does not
change even after the admission of the
new partner then the sacrificing ratio
will be the same as their old ratio will
be the same as their pollination though
we work this out and concluded that if
the sacrificing ratio is 1 is to 1 so
what is the new ratio the new ratio is 2
is to 2 is to 1 what is the sacrificing
ratio it is equal or 1 is to 1 I repeat
whether then the ratio between the old
partners remains the same we need not do
this computation we know that the
sacrificing ratio would also be equal
would be the same as the old pressure
let us consider another example a B and
C are equal partner
and D is admitted and the new ratio is 2
is to 2 is to 1 is to 1 so here if you
notice what was the old ratio a B and C
are equal partners between which means
the ratio was 1 is to 1 is to 1 between
them but now in the new situation where
D has been admitted the profit-sharing
ratio is 2 is to 2 is to 1 is to 1 2 is
to 2 is to 1 there is a change in the
profit-sharing ratio of the among the
old partners after the admission of D
the profit-sharing ratio was equal
before now it is 2 is to 2 is to 1
between a B and C between the old
partners in such a case we have to
compute the sacrificing ratio what would
be the new ratio and what is the
sacrificing ratio what is the new ratio
is already given to us fold ratio equal
so 1/3 1/3 and 1/3 new ratio also given
to us actually 2 is to 2 is to 1 is to 1
2 to 4 plus 1 plus 1 so that is sixth
therefore it is 2 by 6 2 by 6 1 by 6 and
1 by 6 if we deduct so the new ratio 2
by 6 2 by 6 1 by 6 1 by 6 of course 2 by
6 is is 1/3 there is no change in the
ratio nevertheless if we have to compute
we would get the sacrifice as you take 6
you get 2 minus 2 therefore you get 0
there is no sacrifice because mind you 2
6 is nothing but 1/3 so there has been
no change in the ratio of a and B a and
B do not lose anything
they had one third before they continue
to have
third share now therefore the entire
sacrifice is being made by SI anti
sacrifice is being made by sea
so let us see 1/3 minus 1/6 we take 6
common 6 divided by 3 give it 2 minus 6
divided by 6 1 that is 1 that is 1/6 so
what is the sacrifice sacrifice here is
well well and sacrifice here this 1 by 6
so si has sacrificed 1/6 which has been
gained by so what is the new ratio given
to us 2 is to 2 is to 1 is to 1 what is
the sacrificing ratio there is no ratio
as such the entire sacrifice has been
made by sea
so if there is any adjustment with
respect to goodwill if there is any
adjustment with respect to revaluation
of assets and liabilities then only film
needs to be compensated in case of any
profits any gains and we continue will
continue to get the same Wilkin will get
continues to get the same profits same
share of profit and need no further
compensation let us take one more
example a and B carry on business and
share profits and losses in the ratio 3
is to to their respective capitals are
one lakh twenty thousand and fifty four
thousand C is admitted for one-third
share in profit and brings 75 thousand
as his share of capital capitals of a
and B are to be adjusted according to
C's shape calculate the amount refunded
to a what are the options a 30,000 B
32,000 C 15,000 and B 28,000 so when
there is a change in the profit sharing
sure sometimes the partners may agree
to also adjust their capitals in such a
manner that they are at par with the
profit-sharing pressure it is not an
essential requirement it is as per the
agreement so what has been decided here
that capitals of a and B will be
adjusted according to sees shape C is
admitted for 1/3 shade and brings in
75,000 so 1/3 is equal to 75,000
therefore one or the total capital will
be equal to 75,000 into three by one
giving us 2 lakh 25,000 so the total
capital should be two lakh twenty five
thousand one third will be given by C
what about the remaining is admitted for
one-third share in the profit and bring
seventy five thousand capitals of a and
B if nothing is mentioned they will
continue to share the profits and losses
between them will be the same as before
so what is remaining now two-third
remains two-third will be shared by a
and B in the ratio 3 by 5 and 2 by 5
two-third remaining C's chef 1/3 C share
is one-third remaining balance is 2/3
2/3 will be borne by a and B in the
ratio 3 is to 2 so this is 3/5 into
two-third giving us 2 by 5 and this is
2/5 of 2/3 that is equal to 4 by 52 by 5
and 4 by 50 so 2 by 5 I could also write
it as multiplying both the numerator and
the denominator by 3 because I want 15 I
won the
basem denominator here I multiply the
numerator and the denominator by 3 I
will get 6 by 15 2 by 5 is the same as 6
by 15 so what is the share now 6 by 15
and 4 by 15 6 by 15 is a scare what is
the total capital we said is to like
25,000 6 by 15 of 2 lakh 25,000 will
give us 15 is say cancel this would be
15 15 6 are 90 and for B it would be 4
by 15 off to luck 25,000 that would be
60,000 so the Capitals should actually
be a 90,000 be 60,000 and C is already
bringing in 75,000 - like this is how
the tool at 25000 should be there now
what is the position as of now the
respective capitals are one lakh twenty
thousand for a therefore 30,000 needs to
be refunded to a currently it is 54
thousand for B so six thousand should be
refunded to be but they have asked us
only the amount to be refunded to 8a
should be refunded 30,000 B should be
refunded six thousand so the correct
answer in this situation only the amount
refunded to a is thirty thousand