Partners M and N share profits in the ratio 3:2. A new partner O is admitted. The existing partners agree to transfer goodwill of Rs. 18,000 in their old profit sharing ratio. How much goodwill will be transferred from partner M to partner O?

Step-by-step solution

1. Compute the total parts of the old ratio: $3+2=5$.
2. Calculate goodwill from M: $\frac{3}{5}\times 18,000=10,800$.
3. Thus partner M transfers Rs. 10,800 to O.

Concept tested: Goodwill transfer upon admission

Published 27 September 2026 · How this solution was prepared and checked