Calculating Profit Sharing Ratio: Test Your Knowledge

The video tutorial covers the topic of profit sharing among partners, focusing on scenarios such as admission, retirement, or death of a partner. It includes exercises to test knowledge, requiring calculations of old and new ratios, sacrifice ratios, and gaining ratios. The tutorial also discusses the admission of a new partner, Mr. W, and how it affects the existing profit-sharing ratios. The session concludes with a summary of key points and encourages viewers to reflect on the material covered.

What should you keep handy for calculations during the quiz?

• A pen and paper

• A calculator

• A computer

• A smartphone

What was the initial profit-sharing arrangement among Mr. X, Y, and Z?

• 14,006 for Mr. X, 6,000 for Mr. Y, 5,000 for Mr. Z

• 10,000 for each

• Equal shares

• 14,006 for Mr. X, 5,000 for Mr. Y, 6,000 for Mr. Z

How is the old ratio related to the sacrifice and new ratios?

• Old ratio is the sum of sacrifice and new ratios

• Old ratio is the difference between sacrifice and new ratios

• Old ratio is twice the new ratio

• Old ratio is half the sacrifice ratio

What share does Mr. W receive upon admission?

• One-sixth

• One-third

• One-fifth

• One-fourth

Whose share remains unaffected by Mr. W's admission?

• All partners

• Mr. Y

• Mr. Z

• Mr. X

What fraction of their old share do existing partners sacrifice for the new partner?

• One-third

• One-sixth

• One-fifth

• One-fourth

What is the final step in calculating Mr. W's share?

• Retaining the old share

• Distributing the total share equally

• Calculating the sacrificing ratio

• Adding the old and new ratios