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Question
A and B are partners sharing profits in the ratio of 4 : 1. A surrenders `1/4`th of his share and B surrenders `1/3`rd of his share in favour of C, a new partner. C’s share of goodwill is valued at ₹ 1,40,000, and C brings half of his share of goodwill in Cash. What will be A’s share of goodwill?
Options
₹ 52,500
₹ 60,000
₹ 1,05,000
₹ 35,000
MCQ
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Solution
₹ 1,05,000
Explanation:
Sacrifice made by A = `4/5 xx 1/4`
= `4/20`
= `1/5`
Sacrifice made by B = `1/5 xx 1/3`
= `1/15`
To simplify A, use a common denominator of 15:
Sacrifice made by A = `1/5`
= `(1 xx 3)/(5 xx 3)`
= `3/15`
Sacrifice Ratio of A and B = `3/15 : 1/15` or 3 : 1
A’s share of goodwill = `1,40,000 xx 3/4`
= ₹ 1,05,000
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