A and B share profits in the ratio of 5:3. C joins the firm for 3/8 share of profit and brings 6,000 for goodwill. Calculate the distribution of goodwill.
Answers
Explanation:
here is your answer. The sacrificing ratio is equal to the old ratio when we have to consider the total share as 1.
Given : A and B share profits in the ratio of 5:3.
C joins the firm for 3/8 share of profit
6,000 for goodwill.
To Find : distribution of goodwill.
Solution:
A and B share profits in the ratio of 5:3.
A = 5k
B = 3k
Total = 8k
C joins the firm for 3/8 share of profit
Hence C share = (3/8) 8k = 3k
A's new share = 5k - (5/8)3k = 25k/8
B's new share = 3k - (3/8)3k = 15k/8
C' share = 3k = 24k/8
Hence A : B : C = 25 : 15 : 24
distribution of goodwill.
A = (25/ 64) * 6000 = 2343.75
B = (15/64) * 6000 = 1,406.25
C = (24/64) * 6000 = 2250
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