A and B are partners in a firm sharing profits in the ratio of 2 : 1. C is admitted as a partner. A and B surrender 1/2 of their respective share in favour of C. C is to bring his share of premium for goodwill in cash. The goodwill of the firm is estimated at ₹ 60,000. Credit will be given to which partner?
Answer & explanation
Correct answer: option 4
A and B surrender 1/2 of their respective share in favour of C.
A's sacrifice = 2/3 x 1/2
=2/6
B's sacrifice = 1/3 x 1/2
= 1/6
Sacrificing Ratio between A and B=2:1
C's share = 2/6 +1/6
= 3/6 or 1/2
C's Share of Goodwill =1/2*60,000=30,000
C's Share in Goodwill will be shared in the ratio of 2:1 i.e Rs 20,000 for A and Rs 10,000 for B.