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Question
Ganga and Jamuna are partners sharing profits in the ratio of 2 : 1. They admit Saraswati for 1/5th share in future profits. On the date of admission, Ganga’s capital was ₹ 1,02,000 and Jamuna’s capital was ₹ 73,000. Saraswati brings ₹ 25,000 as her share of goodwill and she agrees to contribute proportionate capital to the new firm. How much capital will be brought by Saraswati?
Options
₹ 43,750
₹ 37,500
₹ 50,000
₹ 40,000
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Solution
₹ 50,000
Explanation:
Given:
Capital of Ganga = ₹ 1,02,000
Capital of Jamuna = ₹ 73,000
Saraswati’s share of goodwill = ₹ 25,000
Total capital of theirs = ₹ 2,00,000
Saraswati’s share = `1/5`
Remaining share for Ganga and Jamuna = `1 - 1/5`
= `4/5`
Reciprocal of `4/5 = 5/4`
Total Capital of the firm = `2,00,000 xx 5/4`
= 2,50,000
Saraswati’s capital = `2,50,000 xx 1/5`
= 50,000
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| Capital A/c | Cash at Bank | 4,000 | |
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Liabilities
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Furniture
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