Multiple choice

X & Y sharing profits in the ratio of 3:1. They admit Z as a partner who pays Rs, 4,000 as goodwill the new profit sharing ratio being 2:1:1 among X, Y & Z respectively. The amount of goodwill will be credited to -

  1. X & Y as Rs 3,000 & Rs 1,000 respectively

  2. X only

  3. Y only

  4. None of the above
Reveal answer Fill a bubble to check yourself
B Correct answer
Explanation

Goodwill brought by a new partner is credited to the sacrificing partners in their sacrificing ratio. Old ratio (X:Y) = 3:1. New ratio (X:Y:Z) = 2:1:1. Sacrificing ratio = Old - New. X: 3/4 - 2/4 = 1/4. Y: 1/4 - 1/4 = 0. Since only X sacrifices, the entire goodwill goes to X.

AI explanation

The sacrificing ratio is calculated by subtracting the new ratio from the old ratio. X's sacrifice is 3/4 minus 2/4, which equals 1/4, while Y's sacrifice is 1/4 minus 1/4, which equals zero. Since X is the only partner who sacrifices a portion of his share, the entire Rs. 4,000 goodwill amount brought by Z is credited solely to X.

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