X and Y are partners sharing profits in the ratio 4:3.
Solution:
New Profit Sharing Ratio will be between X : Y : Z = 2 : 2 : 1 (Option B)
It is given that New partner will be admitted for 1/5th share. The only option where Z is given 1/5th Share is Option B
Crosscheck of answer is given hereunder,
Sacrificing ratio = Old ratio - New ratio
X = 4/7 - 2/5 = 6/35
Y = 3/7 - 2/5 = 1/35
Hence, Goodwill is shared in ratio 6: 1.
i.e., 140,000 x 6/7 = 120,000 (X's Share)
and 140,000 x 1/7 = 20,000 (Y's Share)
New Profit Sharing Ratio will be between X : Y : Z = 2 : 2 : 1 (Option B)
It is given that New partner will be admitted for 1/5th share. The only option where Z is given 1/5th Share is Option B
Crosscheck of answer is given hereunder,
Sacrificing ratio = Old ratio - New ratio
X = 4/7 - 2/5 = 6/35
Y = 3/7 - 2/5 = 1/35
Hence, Goodwill is shared in ratio 6: 1.
i.e., 140,000 x 6/7 = 120,000 (X's Share)
and 140,000 x 1/7 = 20,000 (Y's Share)