Q12. A and B are partners in a firm sharing profit and losses in the ratio of 2: 1. They decide
to admit C as a new partner for
1/3 share on 01.04.2023. For this purpose goodwill of the
firm is to be valued on the basis of
two years purchases of the average profits for the last 3
years. The profits of the firm for the last three years were:
Year ending
Profit/(Loss) (*)
31st March 2021
3,00,000
31st March 2022
(1,00,000)
31st March 2023
2,50,000
Additional Information:
(a) There was an abnormal loss of 30,000 in the year ending 31st March, 2021.
(b) Closing Stock as on 31st March, 2023 was overvalued by * 30,000.

Answer :

Answer:

Explanation:To determine the share of C when admitted as a new partner, we need to follow these steps based on the information provided:

A and B are current partners sharing profits and losses in the ratio of 2:1. This means if the total profit (or loss) is distributed, A receives 2 parts and B receives 1 part.

Now, C is admitted as a new partner for a 1/3 share. This indicates that C will receive 1/3 of the total profit (or loss) after the admission.

Let's calculate C's share step by step:

1. **Total Share After Admission:**

  - A and B share in the ratio of 2:1, which totals to 3 parts.

  - C is admitted for a 1/3 share.

2. **Calculate C's Share:**

  - C's share is \( \frac{1}{3} \) of the total.

  - Total parts after admission = 3 (A and B) + 1 (C) = 4 parts.

  Therefore, C's share = \( \frac{1}{3} \) of 4 parts = \( \frac{4}{3} \) parts.

3. **Express C's Share in Ratio:**

  - A : B : C = 2 : 1 : \( \frac{4}{3} \).

To present C's share in a simplified form:

- A's share = \( \frac{2}{3} \) (since \( \frac{2}{3} \) of \( \frac{4}{3} \) parts)

- B's share = \( \frac{1}{3} \) (since \( \frac{1}{3} \) of \( \frac{4}{3} \) parts)

- C's share = \( \frac{4}{3} \) (directly given as \( \frac{4}{3} \) parts)

Therefore, when C is admitted as a new partner for a 1/3 share, C's share of the total profit or loss in the firm will be \( \boxed{\frac{4}{3}} \).

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