A and B 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.
Given,
Partner A and B's Old Ratio = 1:1
Partner A and B's New Ratio = 4:3
Sacrificing Ratio or Gaining Ratio = Old Ratio - New Ratio
Partner A's Share = A's Old Ratio - A's New Ratio
= `1/2` - `4/7` = `7/14` - `8/14` = `-1/14` [Gain]
Partner B's Share = B's Old Ratio - B's New Ratio
= `1/2` - `3/7` = `7/14` - `6/14` = `1/14` [Sacrifice]
∴ Partner A's Gain = `1/14` and
Partner B's Sacrifice = `1/14`
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