Question

A and B are partners sharing profits and losses in the ratio of 3: 2. C is admitted into partnership with 1/5 th share in profit. He pays $1,00,000 as goodwill. The ratio of the partners A, B and C in the new firm would be 3:1:1. Goodwill will be credited to:​

Answer 1

Explanation:

Correct option is

C

NR 3:3:2, SR 9:1

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

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