X and Y have capital accounts of $50 000 each and share profits equally. They plan to admit Z
into partnership.
The new profit sharing ratio will be 2 : 2 : 1. The balances on the capital accounts will also be in
this ratio.
Goodwill is valued at $20 000 and will not be retained in the books of account.
How much cash will Z need to pay to join the partnership?
1 )
$25 000
2 )
$26 000
3 )
$29 000
$30 000
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