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Om and Shyam are sharing profits and losses equally. With effect from 1st April, 2022, they agree to share profits in the ratio of 4: 3. Calculate individual partner’s gain or sacrifice due to the change in ratio.

SOLUTION

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 = 1 / 2 – 4 / 7 = 7 – 8 / 14 = – 1 / 14 (Gain)
Shyam’s share = 1 / 2 – 3 / 7 = 7 – 6 / 14 = 1 / 14 (sacrifice)

∴ Om’s Gain = 1 / 14
Shyam’s Sacrifice = 1 / 14


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