Question

X and Y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z into partnership with `1/5`th share in profits which he acquires equally from X and Y. Z brings in ₹ 40,000 as goodwill in cash. Goodwill amount will be credited to ______.

Options

• X ₹ 20,000; Y ₹ 20,000

• X ₹ 25,000; Y ₹ 15,000

• X ₹ 24,000; Y ₹ 16,000

• X ₹ 4,000; Y ₹ 4,000

Answer 1

X and Y are partners sharing profits and losses in the ratio of 3 : 2. They admit Z into partnership with `1/5`th share in profits, which he acquires equally from X and Y. Z brings in ₹ 40,000 as goodwill in cash. Goodwill amount will be credited to X ₹ 20,000; Y ₹ 20,000.

Explanation:

The problem explicitly states that Z acquires his `1/5`th share in profits equally from X and Y.

 X Sacrifice = `1/5 xx 1/2`

= `1/10`

 Y Sacrifice = `1/5 xx 1/2`

= `1/10`

Z brings ₹ 40,000 as goodwill in cash. This amount is distributed to X and Y in their sacrificing ratio of 1 : 1.

Amount credited to X = `40,000 xx 1/2`

= 20,000

Amount credited to Y = `40,000 xx 1/2`

= 20,000