A, B and C were partner's in a firm sharing profit and losses in the Ratio of 5 : 3 : 2 . They admitted D into partnership for 1/5 share of profit whi - Accountancy MCQ CUET Accountancy 2022 23 Aug Shift 2 PYQs 2026 | ExamTest.live

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A, B and C were partner's in a firm sharing profit and losses in the Ratio of 5 : 3 : 2 . They admitted D into partnership for 1/5 share of profit which he takes equally from A and B. D brought sufficient amount of goodwill in cash. Capital brought in by is Rs. 50, 000 . On the date of admission the Balance Sheet of A, B and C was as follows :Balance Sheet as on 31st March, 2021 Goodwill is to be valued at 3 years purchase of average profit of last 4 years which were Rs. 60, 000 (2017-18), Rs. 60, 000 (18-19), Rs. 30, 000 (19-20). On revaluation it was found that all debtors are good.What would be the new Profit Sharing Ratio :

Solution & Step-by-step Explanation

Old Ratio of A, B, C = 5 : 3 : 2 or \frac{5}{10}, \frac{3}{10}, \frac{2}{10} .D's share = \frac{1}{5} or \frac{2}{10} .D acquires this equally from A and B.Sacrifice by A = \frac{1}{2} of \frac{2}{10} = \frac{1}{10} .Sacrifice by B = \frac{1}{2} of \frac{2}{10} = \frac{1}{10} .New share of A = Old Share - Sacrifice = \frac{5}{10} - \frac{1}{10} = \frac{4}{10} .New share of B = Old Share - Sacrifice = \frac{3}{10} - \frac{1}{10} = \frac{2}{10} .New share of C = \frac{2}{10} (remains unchanged).New share of D = \frac{2}{10} .New Ratio = 4 : 2 : 2 : 2 = 2 : 1 : 1 : 1 .

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A, B and C were partner's in a firm sharing profit and losses in the Ratio of 5 : 3 : 2 . They admitted D into partnership for 1/5 share of profit which he takes equally from A and B. D brought sufficient amount of goodwill in cash. Capital brought in by is Rs. 50, 000 . On the date of admission the Balance Sheet of A, B and C was as follows :Balance Sheet as on 31st March, 2021 Goodwill is to be valued at 3 years purchase of average profit of last 4 years which were Rs. 60, 000 (2017-18), Rs. 60, 000 (18-19), Rs. 30, 000 (19-20). On revaluation it was found that all debtors are good.What would be the new Profit Sharing Ratio :

2 : 1 : 1 : 1

5 : 3 : 2 : 1

4 : 1 : 1 : 1

20 : 12 : 8 : 4

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