A, B and C are partners in a firm sharing profits in the ratio of 3:2:1. D is admitted into the firm for 1/4th share in profits, which he gets 1/8th from A and 1/8th from B. The total capital of the firm is agreed upon as Rs. 1,20,000 and D is to bring in cash equivalent to 1/4th of this amount as his capital. The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. The capitals of A, B and C after all adjustments, are Rs. 40,000, Rs. 35,000 and Rs. 30,000 respectively. Calculate the new capital of A.
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Rs. 45000
Each partner’s new capital is the total capital of the firm in the new profit sharing ratio. The capitals of Rs. 40,000, Rs. 35,000 and Rs. 30,000 are the existing balances; they decide only how much each partner brings in or withdraws, not the new capital.
A’s new share = 3/6 − 1/8 = 12/24 − 3/24 = 9/24
B’s new share = 2/6 − 1/8 = 8/24 − 3/24 = 5/24
C’s share = 1/6 = 4/24
D’s share = 1/4 = 6/24
New ratio A : B : C : D = 9 : 5 : 4 : 6
A’s new capital = Rs. 1,20,000 × 9/24 = Rs. 45,000
A therefore brings in Rs. 5,000 (Rs. 45,000 − Rs. 40,000).
NCERT (2026-27 edition):
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