Question

A and B in a firm sharing profits and loss equally. with effect from 1st april 2019 they agreed to share profits in the ratio of 4:3 . due to change in profit sharing ratio , A's gain or sacrifice will be
​

Answer 1

Given:

• A and B are partners in a firm, sharing profits and losses equally, i.e., 1:1.
• From 1st April, 2019, they decided to share their profits and losses in the ratio 4:3.

To find: A's gain/sacrifice.

Answer:

• A's old share = 1/2
• B's old share = 1/2

• A's new share = 4/7
• B's new share = 3/7

Calculation of sacrifice/gain:

Sacrifice/Gain = Old share - New share

• If the difference is positive, it is a sacrifice.
• If the difference is negative, it is a gain.

For A:

• Sacrifice/Gain = 1/2 - 4/7 = (7 - 8)/14 = -1/14 [Sacrifice]

For B:

• Sacrifice/Gain = 1/2 - 3/7 = (7 - 6)/14 = 1/14 [Gain]

Therefore, A's sacrificing by 1/14.