Double
Entry Book Keeping Ts Grewal Volume1 202122
Solutions
Class
12 Commerce Accountancy
Chapter
4  Change In Profit Sharing Ratio Among The Existing
Partners
Page
No 4.39:
Question
1:
Om and Shyam are
sharing profits and losses equally. With effect from 1st April, 2019, they
agree to share profits in the ratio of 4 : 3.
Calculate individual partner's gain or sacrifice due to the change in ratio.
Answer:
Old Ratio (Om and Shyam) = 1 : 1
New Ratio (Om and Shyam) = 4 : 3
Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio
Om’s share = ½  4/7 = 78/14= 1/14 (Gain)
Shyam’s share = ½  3/7 = 76/14= 1/14 (sacrifice)
∴ Om’s Gain = 1/14
Shyam’s Sacrifice
= 1/14
Page
No 4.39:
Question
2:
Ashok, Bhim
and Chetan
are sharing profits and losses in the ratio of 5 : 3 :
2. With effect from 1st April, 2019, they decide to share profits and losses in
the ratio of 5 : 2 : 3. Calculate each partner's gain
or sacrifice due to the change in ratio.
Answer:
Old Ratio (Ashok, Bhim and Chetan)
= 5 : 3 : 2
New Ratio (Ashok, Bhim and Chetan)
= 5 : 2 : 3
Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio
Ashok’s share =5/10 – 5/10 = nil
Bhim’s share =3/10 – 2/10 = 1/10 (sacrifice)
Chetan’s share =2/10 – 3/10 = 1/10 (Gain)
∴ Chetan’s Gain = 1/10
Bhim’s Sacrifice = 1/10
Page
No 4.39:
Question
3:
X, Y and Z
are sharing profits and losses in the ratio of 5 : 3 :
2. With effect from 1st April, 2019, they decide to share profits and losses
equally. Calculate each partner's gain or sacrifice due to the change in ratio.
Answer:
Old Ratio (X, Y and Z) = 5 : 3 : 2
New Ratio (X, Y and Z) = 1 : 1 : 1
Sacrificing (or Gaining)
Ratio = Old Ratio − New Ratio
X’s
share =5/10 – 1/3 = 1510/30= 5/30
Y’s share =3/10 – 1/3 = 910/30= 1/30
Z’s share =2/10 – 1/3 = 610/30= 4/30
∴ Y’s Gain =
1/30
Z’s Gain = 4/30
X’s Sacrifice = 5/30
Page No 4.39:
Question 4:
A, B and C are partners sharing profits and
losses in the ratio of 5 : 4 : 1. Calculate new
profitsharing ratio, sacrificing ratio and gaining ratio in each of the
following cases:
Case 1. C acquires 1/5th share from A.
Case 2. C acquires 1/5th share equally form A and B.
Case 3. A, B and C will share future profits and
losses equally.
Case 4. C acquires 1/10th share of A and 1/2 share of B.
Answer:
Calculation of New Profit Sharing Ratio
Case 1:
A:B:C=5:4:1(Old Ratio)
C acquires 15th from A
A's sacrifice = 1/5
C's gain = 1/5
A=5/10−1/5= 5−2/10=3/10
B=4/10
C=1/10+1/5=1+2/10 =3/10
A:B:C=3:4:3
Case 2:
A:B:C=5:4:1(Old Ratio)
C acquires 1/5th share equally from A and
B=1/5×1/2=1/10
A's sacrifice = 110
B's sacrifice = 1/10
C's gain = 1/5
A=5/10−1/10
=5−1/10=4/10
B=4/10−1/10=4−1/10=3/10
C=1/10+1/5=1+2/10=3/10
A:B:C=4:3:3
Case 3:
A:B:C=5:4:1(Old Ratio)
A:B:C=1:1:1(New Ratio)
A=5/10−1/3=15−10/30=5/30(Sacrifice)
B=4/10−1/3=12−10/30=2/30(Sacrifice)
C=1/10−1/3=3−10/30=−7/30(Gain)
Case 4:
A:B:C=5:4:1(Old Ratio)
A's sacrifice to C=5/10×1/10=1/20
B's sacrifice to C=4/10×1/2=4/20
C's gain=1/20+4/20=5/20
A=5/10−1/20
=10−1/20=9/20
B=4/10−4/20=8−4/20=4/20
C=1/10+5/20=2+5/20=7/20
A:B:C=9:4:7
Page
No 4.40:
Question
5:
Asha, Nisha
and Disha
shared profits and losses in the ratio of 3 : 2 : 1
respectively. With effect from 1st April, 2019, they agreed to share profits
equally. The goodwill of the firm was valued at `
18,000. Pass necessary Journal entries when:
Answer:
Calculation of Gain/Sacrifice made by the partners:
Particulars 
Asha 
Nisha 
Disha 
Old
Ratio 
3/6 
2/6 
1/6 
New
Ratio 
1/3 
1/3 
1/3 
Gain/Sacrifice 
1/6 (Sacrifice) 
Nil 
1/6 (Gain) 
Journal 

Date 
Particular 
L.F. 
Debit Amount 
Credit Amount 

2019 April
1 
Disha’s Capital A/c (18,000×1/6) 
Dr. 

3,000 


To Asha’s Capital A/c (18,000×1/6) 


3,000 


(Being Adjustment for goodwill) 




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