Math
10. Profit sharing ratio of A and B is 4: 3. C is admitted into the firm with 1/8th share which he acquires equally from A and B. If C brings 4,000 as his share of goodwill in cash find the share of A and B in it.
Ans. [2,000 each].....?
Answers
Answer: The share of both A and B finally is 2,000 at the time the profits taken by C is 4,000.
Step-by-step explanation:-
Math
10. Profit sharing ratio of A and B is 4: 3. C is admitted into the firm with 1/8th share which he acquires equally from A and B. If C brings 4,000 as his share of goodwill in cash find the share of A and B in it.
Ans. [2,000 each].....?:-
So here the profit sharing of A and B is 4:3 but as there investment is in the same ratio the amount of profit each gets is always equal as:-
Both A and B get the same amount of profit irrespective of the time and also due to the investment of C is 1/8th of the share it is quite obvious and true that the values of the net profit of total of A and B is equal to C due to his investment share and also gets the valuation of all the things and stuff so the profits that A and B collectively get is equal to C.
ProfitA+ProfitB=ProfitC.
and profits of A and B is equal and assume it is x rupees.
And profit of C as given in the question is 4,000 rupees so:-
2x=4000 and
x=2000 rupees.
So the profits share of both A and B are equal and it is 4,000 rupees.
Answer:-The share of A and B is 4,000 rupees each.
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