Analyse the case given below and answer the questions that follow:

Alia, Karan and Shilpa were partners in a firm sharing profits in the ratio of 5:3:2. Goodwill appeared in their books at the value 60,000. Karan decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at 2,40,000. The new profit sharing ratio decided among Alia and Shilpa was 2:3.

How much will be transferred to Karan's Capital account for the existing Goodwill?

₹18,000

The correct answer is option 1- ₹18,000.

The existing goodwill will be transferred in the old profit sharing ratio and the old ratio is 5:3:2.
So, Karan will get = 60,000 x 3/10
                            = ₹18,000