Question

Ram and Krishna are profit sharing ratio 3:2

Answer 1

01_042_S02.png" width="80%"> <br> Working Note: <br> 1. Calculation of Sacrificing Ratio (Sacirfice =Old Share-New Share): <br> Ram's sacrifice = 3/5 -5/10=1/10, Rahim's sacrifice = 2/5 -3/10 =1/10 <br> Thus, Sacrificing Ratio of Ram and Rahim = 1/10 : 1/10 or 1:1. <br> 2. Calculation of Hidden Goodwill: Prabhu contributes Capita for 2/10th share =RS.2,00,000 <br> (A) Total capital of the firm should be

<br> (B) Actual total capital of Ram ,Rahim (after adjustment of revaluation loss) and Prabhu is

<br> (C) Hidden Goodwill (A-B) =RS.10,00,000-RS.6,43,000=RS.3,57,000. <br> Prabhu's share of Goodwill =1/5th of RS. 3,57,000=RS.71,400.