A and B were partners in a firm sharing profits and losses in the ratio of 2:1. With effect from 1st January 2022 they agreed to share profits and losses equally. Individual partner’s gain or sacrifice due to change in the ratio will be:
Answer & explanation
Correct answer: option 2
Sacrificing ratio = Old Ratio – New Ratio
A= 2/3 -1/2 = (4-3)/6 = 1/6 sacrifice
B= 1/3 - 1/2 = (2-3)/ 6 = -1/6 gain