Question

X and Y are partners sharing profits in the ratio of 3 : 1. They admit Z as a partner who paid $Rs.40,000$ as Goodwill, the new profit sharing ratio being 2: 1: 1 among X, Y and Z respectively. The amount of goodwill will be credited to __________.

• A. X and Y as $Rs.30,000$ and $Rs.10,000$ respectively
• B. X only
• C. Y only
• D. None of the above

Answer 1

The correct option is B X only

Old ratio (X and Y) = 3 : 1

New ratio ( X, Y and Z) = 2 : 1 : 1

Sacrificing ratio = Old ratio - New ratio

X's sacrificing ratio = (3/4) - (2/4) = 1/4

Y's sacrificing ratio = (1/4) - (1/4) = 0

Therefore, the amount of goodwill will be credited to only sacrificing partner i.e., X