Question

P and S partners sharing profit in the ratio 3:2 r is admitted with 1/5 share and with 84000 share of goodwill which is credited to the capital accounts of P and s with 63000 and 21000. New profit sharing ratio will be

Answer 1

Answer:

Explanation:

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.

Goodwill brought in by new partner = Total goodwill of firm * C's share of profit

Goodwill brought in by new partner = Rs. 20160 * (1/4) = Rs. 10080

Half of goodwill brought in by C on his admission is distributed among A and B in their old ratio i.e., 3 : 2

Amount withdrawn by-

A = Rs. 10080 * (1/2) * (3/5) = 1680

B = Rs. 10080 * (1/2) * (2/5) = 840