Question

X & Y sharing profits in the ratio of $3:1$. They admit Z as a partner who pays $Rs.4,000$ as goodwill the new profit sharing being $2:1:1$ among X,Y & Z respectively. The amount of goodwill will be credited to ___________.

• A. X & Y as $Rs.3,000$ & $Rs.1,000$ respectively
• B. X only
• C. Y only
• D. None of the above

Answer 1

Answer: (B)

X only

At the time of admission of a new partner, goodwill bought in by new partner is distributed among sacrificing partners in their sacrificing ratio.

In the given question -

Old ratio (X and Y) = 3 : 1

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

Sacrificing ratio = Old ratio - New ratio

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

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

Therefore, Goodwill of Rs. 4000 brought in by Z is credited to X only, as only X is sacrificing here.