Sacrificing Ratio in Partnership Accounting

Sacrificing ratio in partnership accounting – The ratio in which an existing partner is ready to sacrifice his share of profit to another partner is known as sacrificing ratio.

The formula for sacrificing ratio is :

Sacrificing Ratio = New Ratio – Old ratio

Sacrificing Ratio in Partnership Accounting : Example 1

A , D and K are partners sharing profits and losses in the ratio of 5 : 5 : 2 respectively. A sacrifices 1/4 of his share  and D sacrifices 1/4 of his share in favour of K .What will be the sacrificing ratio between partners.




Explanation : –

Sacrificing ratio = Old ratio – New ratio

A = 5/12 – 15/48

= (20-15)/48

= 5/48

D = 5/12 – 15/48

= (20-15)/48

= 5/48

5 : 5




Sacrificing Ratio in Partnership Accounting : Example 2

Abra and Dabra are partners sharing profits and losses in the ratio of 6 5 respectively. A new partner Cabra
is admitted into partnership for 10 % share in prots.What will be the sacrificing ratio between partners?

Explanation : –

Let total prot of the firm = 1

is admitted into partnership for s share = 10% = 10/100 = 1/10

Remaining prot after admission of is admitted into partnership for = 1 – (1/10)

= (10-1)/10

= 9/10

Abra will get 6/11 of 9/10 = 54/110

Dabra will get 5/11 of 9/10 = 45/110

New profit sharing ratio between Abra , Dabra and is admitted into partnership for

= 54/110 : 45/110 : 1/10

= (54:45:11)/110

= 54 : 45 : 11

Sacrificing ratio = Old ratio – New ratio

Abra = (6/11) – (54/110)

= (60-54)/110

= 6/110

Dabra = (5/11) – (45/110)

= (50-45)/110

= 5/110

Sacrificing ratio = 6 : 5

Sacrificing Ratio in Partnership Accounting : Example 3

Good and Better are partners sharing profits and losses in the ratio of 7 and 5 respectively. A new partner
Best is admitted into partnership for 10 % share in prots.What will be the sacrificing ratio between partners?





Explanation : –

Let total profit of the firm = 1

Best s share = 10% = 10/100 = 1/10

Remaining prot after admission of Best = 1 – (1/10)

= (10-1)/10

= 9/10

Good will get 7/12 of 9/10 = 63/120

Better will get 5/12 of 9/10 = 45/120

New profit sharing ratio between Good , Better and Best

= 63/120 : 45/120 : 1/10

= (63:45:12)/120

= 63:45:12

Sacrificing ratio = Old ratio – New ratio

Good = (7/12) – (63/120)

= (70-63)/120

= 7/120

Better = (5/12) – (45/120)

= (50-45)/20

= 5/120

Sacrificing ratio = 7 : 5

Sacrificing Ratio in Partnership Accounting : Example 4

Kaya and Maya are partners sharing profits and losses in the ratio of 5 and 3 respectively. A new partner
Saya is admitted into partnership for 40 % share in prots.What will be the sacrificing ratio between partners?





Explanation : –

Let total prot of the firm = 1

Saya s share = 40% = 40/100 = 4/10

Remaining prot after admission of Saya = 1 – (4/10)

= (10-4)/10

= 6/10

Kaya will get 5/8 of 6/10 = 30/80

Maya will get 3/8 of 6/10 = 18/80

New profit sharing ratio between Kaya , Maya and Saya

= (30/80) : (18/80) : (4/10)

= (30:18:32)/80

= 30:18:32

Sacrificing ratio = Old ratio – New ratio

Kaya = 5/8 – 30/80

= (50-30)/80

= 20/80

Maya = (3/8) – (18/80)

= (30-18)/80

= 12/80

Sacrificing ratio = 20 : 12




Chapter 3 Reconstitution of a Partnership Firm – Admission of a Partner

  1. Modes of Reconstitution of a Partnership Firm
  2. Admission of a New Partner
  3. New Profit Sharing Ratio
  4. Sacrificing Ratio
  5. Goodwill
  6. Adjustment for Accumulated Profits and Losses and Capitals
  7. Revaluation of Assets and Reassessment of Liabilities
  8. Change in Profit Sharing Ratio among the Existing Partners
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