Question 3 of 64intermediate🔧 ApplyMCQ1 mark

A and B share profits and losses in the ratio of 3:1, C is admitted into partnership for 1/4 share. The sacrificing ratio of A and B is:

Exercise: Test your Understanding - I | Q: 3 | (Page 8)
For More Understanding

Explanation

When a new partner is admitted and the question does not specify the ratio in which the old partners sacrifice their share, it is assumed that the old partners sacrifice in their existing profit-sharing ratio. Since A and B share profits and losses in the ratio of 3:1, and there is no mention of any specific agreement regarding how they will give up their shares for C's admission, the sacrificing ratio will be the same as their existing profit-sharing ratio. Therefore, the sacrificing ratio of A and B is 3:1.

Solution Steps

  1. Step 1: Identify the existing profit-sharing ratio of A and B = 3:1

  2. Step 2: Check if there is any specific mention of how C acquires his share from A and B - No such information is given

  3. Step 3: Apply the default rule - when no specific sacrificing ratio is mentioned, old partners sacrifice in their existing profit-sharing ratio

  4. Step 4: Therefore, sacrificing ratio of A and B = 3:1

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