A and B are partners in a firm sharing profit and loss as 3:2. They admitted C as a new partner. The profit and loss sharing ratio shall be so adjusted that between A and B the former ratio is maintained, while between B and C there shall be the same ratio as between A and B. What will be the new profit sharing ratio of all partners.
Answers
Answer:
Cash a/c..... Dr. 21000
To Premium for goodwill a/c 21000
(Being Premium for goodwill brought in by C)
2. Premium for goodwill a/c.... Dr. 21000
To A's Capital a/c 9000
To B's Capital a/c 12000
(Being premium for goodwill brought in by C, distributed among the partners in the ratio 3:4)
Working Note:
A's old share= 3/5
B's old share= 2/5
C is admitted as a new partner.
A's sacrifice= 3/5 * 1/5
= 3/25
B's sacrifice= 2/5 * 2/5
= 4/25
Sacrificing ratio= 3:4
C's share= 3/25 + 4/25
= 7/25
Hence, C's share of goodwill= 7/25 * 75000
= 21000