Question

X and Y are partners who share net income in the ratio of 4:3 respectively and have Capital balances of Rs. 10,000 and 8,000 respectively. Z is admitted for 1/8 share and brings Rs. 6,000 for Capital and Rs. 4,200 for goodwill. The new Capital balances of X, Y and Z respectively are Rs.:

• A. 10,000, 8,000 and 10,200
• B. 12,100, 10,100 and 6,000
• C. 10,000, 8,000 and 6,000
• D. 12,400, 9,800 and 6,000

Answer 1

Answer: (D)

12,400, 9,800 and 6,000

New profit sharing ratio will be = 4 : 3 : 1

Goodwill is to be shared amongst X and Y in Sacrificing ratio = 4 : 3.

4200 * 4/ 7 = 2400

4200 * 3 / 7 = 1800

Now, The new capital balances of X,Y and Z will be :

X = 10000 + 2400 = 12400

Y = 8000 + 1800 = 9800

Z = 6000