X and Y are partners sharing profits in the ratio 5:3. They admitted Z for 1/5th profits, for which he paid ₹60,000 against capital and ₹30,000 against goodwill. Find the capital balance for each partner taking Z's capital as base capital.
Answer & explanation
Correct answer: option 3
The correct answer is option 3- ₹1,50,000; ₹90,000 and ₹60,000.
Let total share = 1
Z share = 1/5
Remaining share after Z = 1 - 1/5
= 4/5
This 4/5th share is divided between old partners in their old share
Old ratio between X & Y = 5:3
X's new share = 5/8 x 4/5
= 20/40
Y's new share = 3/8 x 4/5
= 12/40
New ratio = 20/40 : 12/40 : 1/5
= 20/40 : 12/40 : 8/40
= 20:12:8 or 5 :3 :2.
Capital brought by Z = 60,000
Total capital of the firm on the basis of Z share = 60,000 x 5
= 3,00,000
X's capital = 3,00,000 x 5/10
= 1,50,000
Y's capital = 3,00,000 x 3/10
= 90,000
So, capital of partners are X=1,50,000 Y= 90,000 & Z= 60,000.