Question

A and B are partners sharing profits and losses in 3 : 2. They admit C into partnership for a `3/10`th share in the profits. A surrenders `1/3`rd of his share and B surrenders `1/4`th of his share in favour of C. Goodwill of the firm is valued at ₹ 3,00,000 but C is unable to bring his share of goodwill in cash. Credit will be given to ______.

पर्याय

• A ₹ 54,000; B ₹ 36,000

• A ₹ 60,000; B ₹ 30,000

• A ₹ 2,00,000; B ₹ 1,00,000

• A ₹ 1,80,000; B ₹ 1,20,000

Answer 1

A and B are partners sharing profits and losses in 3 : 2. They admit C into partnership for a `3/10`th share in the profits. A surrenders `1/3`rd of his share and B surrenders `1/4`th of his share in favour of C. Goodwill of the firm is valued at ₹ 3,00,000 but C is unable to bring his share of goodwill in cash. Credit will be given to A ₹ 60,000; B ₹ 30,000.

Explanation:

Calculate the Amount of Share Surrendered (Sacrificed) by A and B:

A’s Sacrifice = `1/3 xx 3/5`

= `3/15`

= `1/5`

B’s Sacrifice = `1/4 xx 2/5`

= `2/20`

= `1/10`

The sacrificing shares are `1/5 : 1/10`.

To simplify, use a common denominator of 10:

A’s Sacrifice = `1/5`

= `(1 xx 2)/(5 xx 2)`

= `2/10`

sacrificing Ratio of A and B = `2/10 : 1/10` or 2 : 1

C’s share of profits is the sum of the sacrifices made by A and B:

C’s share = `2/10 + 1/10`

= `3/10`

The total goodwill of the firm is valued at ₹ 3,00,000.

C’s Goodwill = `3,00,000 xx 3/10`

= 90,000

Amount credited to A = `90,000 xx 2/3`

= 60,000

Amount credited to B = `90,000 xx 1/3`

= 30,000