X and Y are partners sharing profits in the ratio of 4 : 3. Z joins partnership for 2/7th share in the profits (of which he acquires 3/4th from X and 1/4th from Y). Z brings in ₹ 3,00,000 for his capital and ₹ 1,20,000 for goodwill

X and Y are partners sharing profits in the ratio of 4 : 3. Z joins partnership for 2/7th share in the profits (of which he acquires 3/4th from X and 1/4th from Y). Z brings in ₹ 3,00,000 for his capital and ₹ 1,20,000 for goodwill. Half of the amount of goodwill is withdrawn by the old partners.

Pass necessary Journal entries and find out new profit sharing ratio.

[Ans. New profit sharing ratio is 5 : 5 : 4.]