Multiple choice

Hum and Tum are partners sharing profits and losses in the ratio 5 : 3. On admission, Woh brings Rs. 70,000 cash and Rs. 48,000 against goodwill. New profit sharing ratio between Hum, Tum and Woh are 7 : 5 : 4. The sacrificing ratio between Hum : Tum will be

  1. 3 : 1

  2. 4 : 7

  3. 5 : 4

  4. 2 : 1
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A Correct answer
Explanation

Old ratio (Hum:Tum) = 5:3. New ratio (Hum:Tum:Woh) = 7:5:4. Hum's sacrifice = Old share (5/8) - New share (7/16) = 10/16 - 7/16 = 3/16. Tum's sacrifice = Old share (3/8) - New share (5/16) = 6/16 - 5/16 = 1/16. Sacrificing ratio (Hum:Tum) = 3/16 : 1/16 = 3:1. This ratio is used to distribute Woh's goodwill of Rs. 48,000.

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