Multiple choice

A, B, C were partners sharing profits in the proportion of $1/2, 1/3$ and $1/6$, respectively. On $31^{st} March, 2001$ their capital stood as follows: $A = Rs. 8,00,000$ $B = Rs. 6,00,000$ $C = Rs. 5,00,000$ A sum of $Rs. 2,40,000$, also appeared as reserve fund in their balance sheet on this date. B retires on the date when the goodwill of the firm was valued at $Rs. 3,60,000$. Profit and loss adjustment account prepared on that date without taking goodwill and reserve fund into consideration showed a net profit or $Rs. 57,000$. The net amount payable to B will be _________.

  1. $Rs. 7,65,000$
  2. $Rs. 8,19,000$
  3. $Rs. 7,27,000$
  4. $Rs, 8,08,000$
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

B's share of capital = 6,00,000. B's share of reserve (1/3 of 2,40,000) = 80,000. B's share of profit (1/3 of 57,000) = 19,000. B's share of goodwill (1/3 of 3,60,000) = 1,20,000. Total = 6,00,000 + 80,000 + 19,000 + 1,20,000 = 8,19,000.

AI explanation

B's capital balance is Rs. 6,00,000 and his share of the reserve fund is 1/3 of Rs. 2,40,000 which equals Rs. 80,000. His share of the profit is 1/3 of Rs. 57,000 which is Rs. 19,000, and his share of the valued goodwill is 1/3 of Rs. 3,60,000 which equals Rs. 1,20,000. The total net amount payable to B is the sum of these amounts: Rs. 6,00,000 plus Rs. 80,000 plus Rs. 19,000 plus Rs. 1,20,000, resulting in Rs. 8,19,000.

Keep practicing — related questions