DEPARTMENT OF TECHNICAL EDUCATION

ANDHRA PRADESH
Name : N. Sai Ram
Designation : Head of CCP
Institute : Govt. Poly. For women,
Kakinada
Semester : IV Semester
Subject : Accountancy—III
Sub-Code : CCP-402
Topic : Partnership accounts
Duration : 50 minutes
Sub Topic : Admission
Teaching Aids : PPT, animation

CCP402.42 1
Objective
On completion of this period you would be
able to:

 Know the meaning of sacrificing ratio

 Different methods of calculating sacrificing ratio

CCP402.42 2
Recap

In the previous class we have already

learned
 The different circumstances under which new
profit sharing ratio is calculated

CCP402.42 3
Sacrificing Ratio
 When a new partner is admitted, old partners lose a
portion of their profit
 This reduction in their profit sharing ratio is called
sacrifice
 The ratio of loss between the old partners is called
sacrificing ratio
 The difference between old ratio and new ratio is
sacrificing ratio

CCP402.42 4
Different Methods of
Calculating Sacrificing Ratio

Method I
 When the share of the new partner is given,
 The existing partners share the remaining profit in
their old ratio
 Hence their sacrificing ratio will also be in their old
ratio
 So, no calculation is required

CCP402.42 5
Illustration

 ‘L’ and ‘M’ are partners sharing profits in 3:2 ratio

They admitted ‘N’ allowing him 1/7th share
 Calculate Sacrificing ratio of ‘L’ and ‘M

CCP402.42 6
Illustration

Solution:
 In the above illustration, it is not specified as to
the extent of sacrifice made by each partner.
 Hence, it is presumed that ‘L & ‘M’ contribute to
‘N’ in their original ratio i.e. 3:2
 So their sacrificing ratio also will be in their old
ratio of 3:2

CCP402.42 7
Calculation
 Total share =1
 N’s share = 1/7
 Remaining share = 1/1 – 1/7 = (7-1)/7 = 6/7
 L’s new share = 6/7 * 3/5 = 18/35
 M’s new share = 6/7 * 2/5 = 12/35
 So, new ratio = 18/35 : 12/35 : 1/7
 = 18/35 : 12/35 : 5/35
 = 18 : 12 : 5

CCP402.42 8
 Contd..

 The new ratio of ‘L’ and ‘M’ is 18 : 12

 Which is the same as their old ratio 3 : 2
 Hence the sacrificing ratio is also 3 : 2

CCP402.42 9
Method - II

When old ratio and new ratio are given:

 New share of the existing partner should be

deducted from their original share to find out their
sacrificing ratio

CCP402.42 10
 Contd..
Method - II

 ILLUSTRATION
 Ram and Shyam are sharing profits in 4:3 ratio
 Bhim is admitted as partner and now Ram,Shyam
and Bhim share profits in 7:4:3 ratio
 Calculate sacrificing ratio

CCP402.42 11
Solution
 There are 2 types of finding out sacrificing ratio:

TYPE I
 Sacrifice by Ram = Ram’s original share – new
share
 = 4/7 - 7/14
 = 4x2 =8 - 7 =1

 7x2 14 14 14

CCP402.42 12
 Contd..
Solution

 Sacrifice by Shyam= Shyam’s original share – new

share
 = 3/7 - 4/14
 = 3x2=6 - 4 = 2
 7x2 14 14
14
 So sacrificing ratio = 1/14 : 2/14 = 1 : 2

CCP402.42 13
Type - II

Ram Shyam Bhim Total of Ratios

Original share of 4 3 - 7
New share of 7 4 3 14

 To find out sacrificing ratio, arrange the total of ratios

in such a way that both the totals are made equal
 In this particular case, if all the ratios in the first row
i.e. Original shares are multiplied by 2

CCP402.42 14
Sacrificing Ratio

Ram Shyam Bhim Total ratios

Original share 8 6 - 14
New share 7 4 3 14
2
1

CCP402.42 15
 Contd..
Sacrificing Ratio

Note: if the total of ratios cannot be made

equal by multiplying one set of ratios, then the
first set should be multiplied by the total of
second set and second set should be
multiplied by the total of first set.

CCP402.42 16
Summary
 The ratio of loss on account of the admission of a
new partner is called SACRIFICING RATIO
 When the share of the new partner and old profit
sharing ratio is given
 No necessity of calculation of sacrificing ratio
 Old ratio, new ratio and sacrificing ration will
 be the same

CCP402.42 17
 Contd..
Summary

When old ratio and new ratio are given:

 Old ratio of the existing partners is to be
deducted from new ratio
 there are two types of calculating sacrificing
ratio

CCP402.42 18