The problem does not specify how the new profit sharing ratio will be determined after C joins the partnership. However, if we assume that C's contribution of 30,000 as his share of goodwill is indicative of his share in the new profit sharing ratio, we can calculate it as follows:

1. First, calculate the total value of the partnership after C's contribution. This is the original goodwill of the firm (3,00,000) plus C's contribution (30,000), which equals 3,30,000.

2. Next, calculate C's share in the new partnership. This is his contribution (30,000) divided by the total value of the partnership (3,30,000), which equals approximately 0.0909 or 9.09%.

3. Now, we need to adjust A and B's shares to account for C's share. Originally, A and B's shares were in the ratio of 3:2, which equals 60% and 40% respectively. If we subtract C's share from 100%, we get 90.91%.

4. We then distribute this 90.91% between A and B in their original ratio of 3:2. This gives A a new share of approximately 54.55% (60% of 90.91%) and B a new share of approximately 36.36% (40% of 90.91%).

So, the new profit sharing ratio of A, B and C will be approximately 54.55 : 36.36 : 9.09.

Please note that this is an approximation and the exact figures may vary slightly due to rounding. Also, this calculation assumes that C's share of the profits is proportional to his contribution to the goodwill of the firm, which may not necessarily be the case in a real-world scenario.

Question

The problem does not specify how the new profit sharing ratio will be determined after C joins the partnership. However, if we assume that C's contribution of 30,000 as his share of goodwill is indicative of his share in the new profit sharing ratio, we can calculate it as follows:

1. First, calculate the total value of the partnership after C's contribution. This is the original goodwill of the firm (3,00,000) plus C's contribution (30,000), which equals 3,30,000.

2. Next, calculate C's share in the new partnership. This is his contribution (30,000) divided by the total value of the partnership (3,30,000), which equals approximately 0.0909 or 9.09%.

3. Now, we need to adjust A and B's shares to account for C's share. Originally, A and B's shares were in the ratio of 3:2, which equals 60% and 40% respectively. If we subtract C's share from 100%, we get 90.91%.

4. We then distribute this 90.91% between A and B in their original ratio of 3:2. This gives A a new share of approximately 54.55% (60% of 90.91%) and B a new share of approximately 36.36% (40% of 90.91%).

So, the new profit sharing ratio of A, B and C will be approximately 54.55 : 36.36 : 9.09.

Please note that this is an approximation and the exact figures may vary slightly due to rounding. Also, this calculation assumes that C's share of the profits is proportional to his contribution to the goodwill of the firm, which may not necessarily be the case in a real-world scenario.

Knowee AI · Accepted Answer

The problem does not specify how the new profit sharing ratio will be determined after C joins the partnership. However, if we assume that C's contribution of 30,000 as his share of goodwill is indicative of his share in the new profit sharing ratio, we can calculate it as follows:

1. First, calculate the total value of the partnership after C's contribution. This is the original goodwill of the firm (3,00,000) plus C's contribution (30,000), which equals 3,30,000.

2. Next, calculate C's share in the new partnership. This is his contribution (30,000) divided by the total value of the partnership (3,30,000), which equals approximately 0.0909 or 9.09%.

3. Now, we need to adjust A and B's shares to account for C's share. Originally, A and B's shares were in the ratio of 3:2, which equals 60% and 40% respectively. If we subtract C's share from 100%, we get 90.91%.

4. We then distribute this 90.91% between A and B in their original ratio of 3:2. This gives A a new share of approximately 54.55% (60% of 90.91%) and B a new share of approximately 36.36% (40% of 90.91%).

So, the new profit sharing ratio of A, B and C will be approximately 54.55 : 36.36 : 9.09.

Please note that this is an approximation and the exact figures may vary slightly due to rounding. Also, this calculation assumes that C's share of the profits is proportional to his contribution to the goodwill of the firm, which may not necessarily be the case in a real-world scenario.

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

Question

Solution

Similar Questions

Upgrade your grade with Knowee