Question

Atul and Neera were partners in firm sharing profits in the ratio of 3 : 2. They admitted Mitali as a new partner. Goodwill of the firm was valued at ₹ 2,00,000. Mitali brings her share of a goodwill premium of ₹ 20,000 in cash, which is entirely credited to Atul's Capital Account. Calculate the new profit sharing ratio.

Answer 1

Revalued Goodwill of the firm on Mitali’s admission = ₹ 2,00,000
Premium for Goodwill brought in cash by Mitali = ₹ 20,000

So, Mitali’s share in future profit of the firm = `(20,000)/(2,00,000) = 1/10`

Atul’s Account has only been credited by the premium brought in by Mitali

So, Atul’s Sacrificing Share = Profit Share of Mitali  = `1/10`

New Profit Share of Atul = Old Profit Share – Sacrificing Share

New Profit Share of Atul = `3/5 - 1/10`

= `5/10`

Hence,

New Profit Share of Neera = `2/5 xx 2/2`

= `4/10`

New profit-sharing ratio `5/10 : 4/10 : 1/10` or 5 : 4 : 1.