Question

1 point
4. A and B are partners sharing
profits in the ratio of 3:2. They
admit C into the partnership with
1/4th share in future profits. The
new profit sharing ratio is 5:4:3. The
firm's goodwill on C's admission
was valued at 1,44,000. But C
could not bring any amount for
goodwill in cash. Credit will be
given to:​

Answer 1

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12th

Accountancy

Change in Profit-Sharing Ratio Among the Existing Partners

Concept of Reconstitution of Firm

A and B are partners sharin...

ACCOUNTANCY

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Asked on December 26, 2019 by

Nupur Katni

A and B are partners sharing profits and losses in the ratio of 3:2. They admit C into the partnership for one-fourth share of the profits while A and B as between themselves are sharing profits & losses equally. The new profit sharing ratio will be _______.

A

NR 3:3:2, SR 1:9

B

NR 4:2:2, SR 9:1

C

NR 3:3:2, SR 9:1

D

None of these

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ANSWER

Old ratio (A and B) = 3 : 2

C is admitted for 1/4 share

Let the combined share of A, B and C = 1

Combined share of A and B after C's admission = 1 - C's share

= 1 - (1/4) = 3/4

New share :

A = (3/4) * (1/2) = 3/8

B = (3/4) * (1/2) = 3/8

C = 1/4

Therefore, A : B : C = 3/8 : 3/8 : 1/4

= 3 : 3 : 2

Sacrificing ratio = Old ratio - New ratio

A's sacrifice = (3/5) - (3/8) = 9/24

B's sacrifice = (2/5) - (3/8) = 1/24

Therefore, sacrificing ratio of A and b is 9 : 1