**Solution**

| A | B |

OLD RATIO | 2 | 5 |

**C is admitted for 1/4share****Let the combined share of A, B and C be = 1****Combined share of A and B after C’s admission = 1 − C’s share****= 1-1/4 =3/4**

**New Ratio = Old Ratio × Combined share of A and B**

A’s | = 2/7 × 3/4 |

= 6/28 | |

B’s | = 5/7 × 3/4 |

= 15/28 |

**New profit-sharing ratio=**

A | B | C |

6/28 | 15/28 | 1/4 |

6/28 | 15/28 | 7/28 |

6 | 15 | 7 |

__Distribution of C’s share of Goodwill__

C’s share of Goodwill = Rs. 14,000

A will get = 14,000 × 2/7 = 4,000

B will get = 14,000 × 5/7= 10,000