Question

Ram, Krishna and Ganesh were sharing profits and losses in the ratio of 5 : 3 : 2. Ram retires and Krishna and Ganesh share the future profits and losses equally. Goodwill of the firm is valued at ₹ 1,00,000. Calculate the amount of goodwill to be debited to Krishna’s and Ganesha’s Capital A/c.

Options

• ₹ 60,000 & ₹ 40,000

• ₹ 20,000 & ₹ 30,000

• ₹ 40,000 & ₹ 60,000

• ₹ 30,000 & ₹ 20,000

Answer 1

₹ 20,000 & ₹ 30,000

Explanation:

Old ratio = 5 : 3 : 2

New ratio = 1 : 1

Gaining Ratio = New Ratio – Old ratio 

Krishna = `1/2-3/10=(10-6)/20=4/20`

Ganesh = `1/2-2/10=(10-4)/20=6/20`

= 4 : 6 

∴ Gaining Ratio = 2 : 3

Goodwill of the firm = ₹ 1,00,000

Ram = `1,00,000xx5/10`= ₹ 50,000

Krishna’s Share of Goodwill = `50,000xx2/5` = ₹ 20,000

Ganesh’s Share of Goodwill = `50,000xx3/5` = ₹ 30,000