Question

Tinku and Rinku were partners sharing P&L in the ratio 7:5. They admitted Pinku as a new partner for 20% share. Goodwill of the firm was valued at ₹ 6,00,000. Goodwill share credited to Tinku was ₹ 80,000. What was the sacrificing ratio? a) 7 : 5 b) 1 : 1 3 c) 2 : 13 d) 2 : 1

Answer 1

Given:

• Tinku and Rinku were partners in a firm, sharing profits and losses in the ratio 7:5.
• Pinku was admitted into the firm for 20% share, i.e., 1/5.
• Goodwill of the firm was valued at Rs 6,00,000.
• Goodwill share credited to Tinku was Rs 80,000.

To find: The sacrificing ratio.

Answer:

• Tinku's old share = 7/12
• Rinku's old share = 5/12

• Pinku's share = 1/5

Let the total profit be assumed as 1.

Remaining profit [for Tinku and Rinku] = 1 - 1/5 = 4/5

The remaining profit will be distributed among Tinku and Rinku in their old profit-sharing ratio to get the new one.

Calculation of the new profit-sharing ratio:

For Tinku:

• New share = 4/5 × 7/12 = 28/60

For Rinku:

• New share = 4/5 × 5/12 = 20/60

For Pinku:

• New share = 1/5, or 12/60

Therefore, the new profit-sharing ratio is 28:20:12, or 7:5:3.

Calculation of the sacrificing ratio:

Sacrificing ratio = Old share - New share

For Tinku:

• 7/12 - 7/15 = (105 - 84)/180 = 21/180

For Rinku:

• 5/12 - 5/15 = (75 - 60)/180 = 15/180

Therefore, the sacrificing ratio is 21:15, or (A) 7:5.

In other words, if the new profit-sharing ratio hasn't been mentioned, the old profit-sharing ratio will be the sacrificing ratio.