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A goodwill premium of ₹25,000 received from the new partner is to be distributed among the old partners in their sacrificing ratio of 2:2:1. How much will the third old partner receive?

Answer and explanation

Correct answer: ₹5,000

The total parts in the sacrificing ratio are \(2+2+1=5\). The third partner’s share is 1 part, so he receives \(₹25,000 \times \frac{1}{5}=₹5,000\). The amount of ₹10,000 would belong to a partner sacrificing 2 parts. In exams, first add the ratio parts before distributing the goodwill premium.

Related tags

Goodwill AccountingSacrificing RatioAdmission Of PartnerPremium DistributionReconstitution Admission Of A PartnerAccountancyClass 12 Mcq

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