Mohit, Neeraj and Sohan are partners in a firm sharing profits in the ratio of 2: 1: 1. Neeraj retires and Mohit and Sohan decided that the capital of the new firm will be fixed at Rs. 1,20,000. The capital accounts of Mohit and Sohan show a credit balance of Rs. 82,000 and Rs. 41,000 respectively after making all the adjustments. Calculate the actual cash to be paid off or to be brought in by the continuing partners in total.
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Rs. 3000 paid off
When the capital of the new firm is fixed, each continuing partner’s capital should be in the new profit sharing ratio. A partner whose adjusted capital is more than that is paid off the excess; one whose capital is less brings in the shortfall.
New ratio of Mohit and Sohan = 2:1
Mohit’s required capital = Rs. 1,20,000 × 2/3 = Rs. 80,000
Sohan’s required capital = Rs. 1,20,000 × 1/3 = Rs. 40,000
Mohit’s excess = Rs. 82,000 − Rs. 80,000 = Rs. 2,000 (paid off)
Sohan’s excess = Rs. 41,000 − Rs. 40,000 = Rs. 1,000 (paid off)
Total paid off = Rs. 2,000 + Rs. 1,000 = Rs. 3,000
NCERT (2026-27 edition):
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