Practicing Success

Target Exam

CUET

Subject

Accountancy

Chapter

Reconstitution of Partnership Firm: Retirement and Death

Question:

Read the following passage and answer the question.

Ravi, Kavi and Sunny are partners in a firm sharing profits and losses in the ratio 4 : 2 : 3. On 1st April 2022, Sunny gives notice for his retirement. His share was taken by Ravi and Kavi in 13 : 11 and goodwill of the firm was valued at ₹ 72000.

After three months, they admit Hari as a new partner for $\frac{1}{5}$th share in firm who brings ₹ 2,00,000 as capital and necessary amount for goodwill in cash which was valued ₹ 80,000 for the firm. Hari acquired his share equally from Ravi and Kavi.

Identify the new profit sharing ratio between Ravi and Kavi after Sunny retirement.

Options:

2 : 1

13 : 11

5 : 3

4 : 3

Correct Answer:

5 : 3

Explanation:

The correct answer is Option (3) - 5 : 3.

Old ratio = 4:2:3
Gaining ratio = 13:11
Sunny's share = 3/9

Acquired share by Ravi = 3/9 x 13/24
                                  = 13/72

Acquired share by Kavi = 3/9 x 11/24
                                  = 11/72

Ravi's new share = 4/9 + 13/72
                            = (32+13)/72
                            = 45/72

Kavi's new share = 2/9 + 11/72
                            = (16+11)/72
                            = 27/72

New ratio = 45/72 : 27/72
              = 45:27
              = 5:3