Question

X, Y and Z are partners in a firm sharing profits in the ratio of 3 : 2 : 1. On 1st April, 2009, Y retires from the firm. X and Z agree that the capital of the new firm shall be fixed at ₹ 2,10,000 in the profit-sharing ratio. The Capital Accounts of X and Z after all adjustments on the date of retirement showed balance of ₹ 1,45,000 and ₹ 63,000 respectively. State the amount of actual cash to be brought in or to be paid to the partners.

Answer 1

Y's share of goodwill is to be distributed between X and Z in their =3 : 1(Gaining Ratio)

Explanation:

X : Y : Z =   3 : 2 : 1( Old ratio)

Y retires from the firm.

Gaining Ratio = x : z =3 : 1

Total capital of the new firm =Rs. 2,10,000

Y's share of goodwill is to be distributed between X and Z in their =3 : 1(Gaining Ratio)

X's  = 2,10,000×$\frac{3}{4}$ = 1,57,500 rs.

Z's  = 2,10,000 ×$\frac{1}{4}$ =  52,500 rs.