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Salary/Commission

X and Y are p...

Question

X and Y are partners in a partnership firm sharing profits in the ratio of 5:3 with a capital of Rs. 5,00,000 & Rs. 4,00,000 respectively. Z was admitted on the following terms: Z would pay Rs. 100,000 as capital and Rs. 32,000 as Goodwill, for a 1/5th share of profit. The balances of capital accounts after the admission of Z will be in the ratio of _______.

A

5,20,000 : 4,12,000 : 1,00,000

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B

5,00,000 : 4,00,000 : 1,00,000

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C

5,12,000 : 4,20,000 : 1,00,000

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D

None of these

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Solution

The correct option is A 5,20,000 : 4,12,000 : 1,00,000
When a new partner brings goodwill in cash, it is shared among the existing partners in sacrificing Ratio.

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