A and B are in partnership sharing profits in the ratio of 3:2. They take C as a new partner. Goodwillof the firm is valued at 3,00,000 and C brings 30,000 as his share of goodwill in cash which is entirelycredited to the Capital Account of A. New profit sharing ratio will be: (1)(A) 3:2:1 (B) 6:3:1 (C) 5:4:1 (D) 4:5:1
Question
A and B are in partnership sharing profits in the ratio of 3:2. They take C as a new partner. Goodwillof the firm is valued at 3,00,000 and C brings 30,000 as his share of goodwill in cash which is entirelycredited to the Capital Account of A. New profit sharing ratio will be: (1)(A) 3:2:1 (B) 6:3:1 (C) 5:4:1 (D) 4:5:1
Solution
The question is about the calculation of the new profit sharing ratio after the introduction of a new partner in a business partnership. Here are the steps to solve this:
Step 1: Identify the original profit sharing ratio. In this case, it's 3:2 for A and B.
Step 2: Identify the goodwill brought in by the new partner. In this case, C brings in 30,000 as his share of goodwill.
Step 3: The question states that the goodwill brought in by C is entirely credited to the Capital Account of A. This means that A's share increases by the amount of goodwill brought in by C. However, the question does not specify how this affects the profit sharing ratio.
Step 4: Without additional information, we cannot definitively determine the new profit sharing ratio. The question does not specify how the goodwill brought in by C is distributed among the partners or how it affects their profit sharing ratio.
Therefore, based on the information given in the question, we cannot determine the new profit sharing ratio.
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