CSEET · Fundamentals of Accounting · Partnership and LLP Accounts
P and Q share profits in the ratio 2:1. R is admitted for a 1/4 share, taking it from P and Q in their old ratio. What is the sacrificing ratio of P and Q?
The sacrificing ratio is 2:1. R's 1/4 share is taken from P and Q in their old ratio, so P gives up 1/6 and Q gives up 1/12. Sacrifice equals old share times the new partner's share, so the proportion stays 2:1.
- A1:1
- B2:1Correct
- C3:1
- D1:2
Explanation
When the new share is taken in the old ratio, the sacrifice is in proportion to old shares. R's 1/4 comes 2/3 from P (1/6) and 1/3 from Q (1/12). Sacrifice is 1/6:1/12 = 2:1. Equal sacrifice (1:1) would apply only if specified.
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