Multiple choice

A & B are partners of a partnership firm sharing profits in the ratio of $5:3$ with capital of Rs. $2,50,000$ & Rs. $2,00,000$. C was admitted on the following terms: C would pay Rs. $50,000$ as capital and Rs. $16,000$ as Goodwill, for $1/5$th share of profit. Find the balance of capital accounts after admission of C.

  1. $2,60,000 : 2,06,000 : 50,000$
  2. $2,20,000 : 1,82,000 : 66,000$
  3. $2,92,500 : 2,25,000 : 50,000$
  4. $2,82,500 : 2,19,500 : 66,000$
Reveal answer Fill a bubble to check yourself
A Correct answer
Explanation

C brings 50,000 capital and 16,000 goodwill. Goodwill is shared by A and B in their profit ratio 5:3. A gets 10,000, B gets 6,000. New capitals: A = 250,000 + 10,000 = 260,000. B = 200,000 + 6,000 = 206,000. C = 50,000.

AI explanation

Since C pays 16000 for goodwill and the account will not remain open, this amount is distributed to A and B in their sacrificing ratio of 5:3. A receives 5/8 of 16000, which is 10000, and B receives 6/8 of 16000, which is 6000. Adding these to their respective capitals of 250000 and 200000, the final balances are 260000 and 206000, while C's account is his brought-in capital of 50000.

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