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Question
Selvam and Senthil are partners sharing profit in the ratio of 2 : 3. Siva is admitted into the firm with 1/5 share of profit. Siva acquires equally from Selvam and Senthil. Calculate the new profit sharing ratio and sacrificing ratio.
Solution
New Profit Sharing Ratio:
Siva’s share = `1/5 xx 1/2 = 1/10`
Selvam’s share = `2/5 - 1/10 = (4 - 1)/10 = 3/10`
Senthil’s share = `3/5 - 1/10 = (6 - 1)/10 = 5/10`
Siva’s share = `1/10 + 1/10 = 2/10`
New Profit sharing Ratio = 3 : 5 : 2
Sacrificing Ratio = 1 : 1
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RELATED QUESTIONS
If the old profit sharing ratio is more than the new profit sharing ratio of a partner, the difference is called ____________.
Match List I with List II and select the correct answer using the codes given below:
| List I | List II |
| (i) Sacrificing ratio | 1. Investment fluctuation fund |
| (ii) Old profit sharing ratio | 2. Accumulated profit |
| (iii) Revaluation Account | 3. Goodwill |
| (iv) Capital Account | 4. Unrecorded liability |
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