Question

A and B C were partners in a firm sharing prfit or loss in the ratio of `3:1` With effect from Jan. 1,2019 they agreed to share profit or loss in the ratio of `2:1.` Due to change in profit-loss sharing ratio, B's gain or sacrifice will be :

Answer 1

B's gain or sacrifice will be :1/12

Answer 2

★ Appropriate Question :

A and B were partners in a firm sharing profit or loss in the ratio of 3 : 1. With effect from Jan. 1, 2019 they agreed to share profit or loss in the ratio of 2 : 1. Due to change in profit-loss sharing ratio, B’s gain or sacrifice will be :

Explanation:

Solution :

★ Old Ratio :

A : B = 3 : 1

• A's Share = $\dfrac{3}{4}$

• B's Share = $\dfrac{1}{4}$

With effect from Jan. 1, 2019 they agreed to share profit or loss in the ratio of 2 : 1.

★ New Profit Sharing Ratio :

A : B = 2 : 1

• A's New Share = $\dfrac{2}{3}$

• B's New Share = $\dfrac{1}{3}$

Due to change in profit-loss sharing ratio,

B’s gain or sacrifice = ??

★ B’s Sacrifice or Gain = Old Ratio - New Ratio

$\longrightarrow \: \dfrac{1}{4} \: - \: \dfrac{1}{3} \: = \: \dfrac{(3 \: - \: 4)}{12}$

$\longrightarrow \: \dfrac{( \: - \: 1) }{ \: 12} \: - - - - \: (Gain)$

$B's \: Gain \: = \: \dfrac{1}{12}$

Therefore,

Due to change in profit-loss sharing ratio, B’s Gain will be : $\dfrac{1}{12}$