Question

A and B are partners sharing profits in the ratio of $7:3$. A surrenders $1/7$th of his share and B surrenders $1/3$rd of his share in favour of C, a new partner. The new profit sharing ratio and sacrificing ratio will be _________.

• A. NR $1:3:1$, SR $1:1$
• B. NR $2:2:1$, SR $1:1$
• C. NR $3:1:1$, SR $7:3$
• D. NR $3:1:1$, SR $1:1$

Answer 1

Answer: (D)

NR $3:1:1$, SR $1:1$

Old ratio (A and B) = 7 : 3

Sacrifice ratio of A = (7/10) * (1/7) = 1/10

Sacrifice ratio of B = (3/10) * (1/3) = 1/10

New ratio = Old ratio - Sacrificing ratio

A's new ratio = (7/10) - (1/10) = 6/10

B's new ratio = (3/10) - (1/10) =2/10

C's share = A's sacrifice + B's sacrifice

= (1/10) + (1/10) = (2/10)

New profit sharing ratio = 6 : 2 : 2 or 3 : 1 : 1

Sacrificing ratio of A and B = 1 : 1