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Calculating Gaining Ratio

A and B are p...

Question

A and B are partners sharing the profit in the ratio of 3 : 2 they take C as the new partner, who brings in 25,000 against capital and 10,000 against goodwill. New profit sharing ratio is 1 : 1 : 1. In what ratio will this amount be shared among the old partners A and B?

A

8, 000 : 2, 000

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B

5, 000 : 5, 000

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C

Old partners will not get any share in the goodwill bought in by C.

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D

6, 000 : 4, 000

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Solution

The correct option is B $8, 000 : 2, 000$
At the time of admission of a new partner, When capital goodwill is bring by the new partner it is divided among the partners in their gaining and sacrificing ratio. It means gaining partner's capital A/c is credited and sacrificing partner's capital A/c is debited.
Calculation of sacrificing ratio:
Sacrificing Ratio = Old Ratio - New Ratio
A's sacrificing ratio = (3/5) - (1/3) = 4/15
B's sacrificing ratio = (2/5) - (1/3) = 1/15
Therefore, sacrificing ratio of A and B is 4 : 1 or 8 : 2 or 8000 : 2000
Therefore, amount brought in by the new partner is divided among Sacrificing partner in sacrificing ratio i.e., 8000 : 2000 or 8 : 2 or 4 : 1

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Q. A admitted as a new partner for 1/ 4 share of future profits, fails to bring in cash of Rs. 5,000 towards goodwill but the existing (old) partners B and C sharing profits in the ratio of 3 : 2 raise goodwill account at its full value. Therefore, partners will be credited for goodwill as:

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1^{s t}

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