Question

$X$ and $Y$ are partners sharing profits in the ratio of $2:1$. They admit $Z$ into the partnership for ${\frac{1}{4}}^{th}$ share in profit for which he brings in Rs.$20,000$ as his share capital. Hence, the adjusted capital of $X$ and $Y$ will be __________ .

• A. Rs.$40,000$ and Rs.$20,000$ respectively
• B. Rs.$32,000$ and Rs.$16,000$ respectively
• C. Rs.$60,000$ and Rs.$30,000$ respectively
• D. None of these

Answer 1

Answer: (A)

$Rs.40,000$ and $Rs.20,000$ respectively

Capital brought in by $Z=Rs.20000$

Total Capital of the firm based on $Z^{\prime }s$ share $=20000\times \frac{4}{1}$

$=80000$

Hence, Capital remaining with $Z=80000-20000=Rs.60000$

$X^{\prime }s$ adjusted Capital $=\frac{2}{3}\times 60000=Rs.40000$

$Y^{\prime }s$ adjusted Capital $=\frac{1}{3}\times 60000=Rs.20000$