R and S were partners sharing profits in the ratio of 2 : 1 respectively. After all adjustments, R's Capital is ₹1,02,000 and S's Capital is ₹73,000. They admitted M and agreed to give him 1/5th share in future profit. M brought ₹14,000 as his share of goodwill. He also agreed to contribute capital in the new profit sharing ratio. How much capital would be brought by M?

₹43,750

The correct answer is option 1- ₹43,750.

After all adjustments, R's Capital is ₹1,02,000 and S's Capital is ₹73,000.

Thus, Total Capital of R & S = 1,02,000 + 73,000
                                           = ₹1,75,000

Total share = 1
M' share = 1/5
Share of R and S in new firm = 1-1/5
                                              = (5-1)/5
                                              = 4/5
For the 4/5th share of R & S, capital is ₹1,75,000.

Total Capital of firm on the basis of share of R & S = 1,75,000 x 5/4
                                                                               = 2,18,750

Share of M in capital = 1/5 x 2,18,750
                                 = 43,750

Thus, capital brought by M was ₹43,750.