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X, Y and Z are partners sharing profits in the ratio 2:2:1. On retirement of Y, goodwill was valued as Rs. 30,000. The contribution of X and Z to compensate Y will be __________
- a)Rs. 20,000 and Rs. 10,000
- b)Rs. 8,000 and Rs. 4,000
- c)They will not contribute any thing.
- d)Information is insufficient for any comment
Correct answer is option 'B'. Can you explain this answer?
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Most Upvoted Answer
X, Y and Z are partners sharing profits in the ratio 2:2:1. On retirem...
To calculate the contribution of X and Z to compensate Y on retirement, we need to consider the ratio in which the profits were shared and the value of goodwill.
Given:
Profit sharing ratio of X, Y, and Z = 2:2:1
Goodwill value = Rs. 30,000
Step 1: Calculate the total profit shared by X, Y, and Z
Let's assume the total profit is P.
According to the profit sharing ratio, X's share of profit = 2P/5
Y's share of profit = 2P/5
Z's share of profit = P/5
The total profit = X's share + Y's share + Z's share
P = 2P/5 + 2P/5 + P/5
P = 4P/5 + P/5
P - 4P/5 = P/5
P/5 = P/5
So, the total profit is P.
Step 2: Calculate the value of Y's share in the goodwill
The value of Y's share in the goodwill can be calculated using the profit sharing ratio.
Y's share in the goodwill = (Y's share of profit / Total profit) * Goodwill value
Y's share in the goodwill = (2P/5 / P) * Rs. 30,000
Y's share in the goodwill = (2/5) * Rs. 30,000
Y's share in the goodwill = Rs. 12,000
Step 3: Calculate the compensation to be given by X and Z to Y
Since Y is retiring, X and Z need to compensate Y for his share in the goodwill.
X and Z will contribute equal amounts to compensate Y as per the profit sharing ratio.
Let's assume the contribution of X and Z is C.
X's contribution = Z's contribution = C
Total contribution = X's contribution + Z's contribution
Rs. 12,000 = C + C
Rs. 12,000 = 2C
C = Rs. 12,000 / 2
C = Rs. 6,000
Therefore, the contribution of X and Z to compensate Y will be Rs. 6,000 each, which is option B.
Given:
Profit sharing ratio of X, Y, and Z = 2:2:1
Goodwill value = Rs. 30,000
Step 1: Calculate the total profit shared by X, Y, and Z
Let's assume the total profit is P.
According to the profit sharing ratio, X's share of profit = 2P/5
Y's share of profit = 2P/5
Z's share of profit = P/5
The total profit = X's share + Y's share + Z's share
P = 2P/5 + 2P/5 + P/5
P = 4P/5 + P/5
P - 4P/5 = P/5
P/5 = P/5
So, the total profit is P.
Step 2: Calculate the value of Y's share in the goodwill
The value of Y's share in the goodwill can be calculated using the profit sharing ratio.
Y's share in the goodwill = (Y's share of profit / Total profit) * Goodwill value
Y's share in the goodwill = (2P/5 / P) * Rs. 30,000
Y's share in the goodwill = (2/5) * Rs. 30,000
Y's share in the goodwill = Rs. 12,000
Step 3: Calculate the compensation to be given by X and Z to Y
Since Y is retiring, X and Z need to compensate Y for his share in the goodwill.
X and Z will contribute equal amounts to compensate Y as per the profit sharing ratio.
Let's assume the contribution of X and Z is C.
X's contribution = Z's contribution = C
Total contribution = X's contribution + Z's contribution
Rs. 12,000 = C + C
Rs. 12,000 = 2C
C = Rs. 12,000 / 2
C = Rs. 6,000
Therefore, the contribution of X and Z to compensate Y will be Rs. 6,000 each, which is option B.
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Community Answer
X, Y and Z are partners sharing profits in the ratio 2:2:1. On retirem...
On the retirement y share of goodwill is 30000 x 2/5 = 12000 which has to be paid by x and z in old psr so x has to pay 12000 x 2/3 = 8000 and z has to pay 12000 x 1/3 = 4000
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X, Y and Z are partners sharing profits in the ratio 2:2:1. On retirement of Y, goodwill was valued as Rs. 30,000. The contribution of X and Z to compensate Y will be __________a)Rs. 20,000 and Rs. 10,000b)Rs. 8,000 and Rs. 4,000c)They will not contribute any thing.d)Information is insufficient for any commentCorrect answer is option 'B'. Can you explain this answer?
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X, Y and Z are partners sharing profits in the ratio 2:2:1. On retirement of Y, goodwill was valued as Rs. 30,000. The contribution of X and Z to compensate Y will be __________a)Rs. 20,000 and Rs. 10,000b)Rs. 8,000 and Rs. 4,000c)They will not contribute any thing.d)Information is insufficient for any commentCorrect answer is option 'B'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about X, Y and Z are partners sharing profits in the ratio 2:2:1. On retirement of Y, goodwill was valued as Rs. 30,000. The contribution of X and Z to compensate Y will be __________a)Rs. 20,000 and Rs. 10,000b)Rs. 8,000 and Rs. 4,000c)They will not contribute any thing.d)Information is insufficient for any commentCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for X, Y and Z are partners sharing profits in the ratio 2:2:1. On retirement of Y, goodwill was valued as Rs. 30,000. The contribution of X and Z to compensate Y will be __________a)Rs. 20,000 and Rs. 10,000b)Rs. 8,000 and Rs. 4,000c)They will not contribute any thing.d)Information is insufficient for any commentCorrect answer is option 'B'. Can you explain this answer?.
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