Question

A and B are partners sharing profits in the ratio of $3:2$. C is admitted paying a premium with $1/4$th share of profit of which he acquires $1/6$th from A and $1/12$th from B. The goodwill of the firm is valued at $Rs.20,160$. One half of goodwill is withdrawn by the partners. A and B withdrew _________.

• A. $Rs.1,680$ and $Rs.840$
• B. $Rs.840$ and $Rs.1680$
• C. $Rs.3,360$ and $Rs.1680$
• D. $Rs.2,520$ and $Rs.2,520$

Answer 1

The correct option is A $Rs.1,680$ and $Rs.840$

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.

Goodwill brought in by new partner = Total goodwill of firm * C's share of profit

Goodwill brought in by new partner = Rs. 20160 * (1/4) = Rs. 10080

Half of goodwill brought in by C on his admission is distributed among A and B in their old ratio i.e., 3 : 2

Amount withdrawn by-

A = Rs. 10080 * (1/2) * (3/5) = 1680

B = Rs. 10080 * (1/2) * (2/5) = 840