Question 06 Chapter 5 of +2-A - T.S. Grewal 12 Class Part

Question 06 Chapter 5 of +2-A

Table of Contents

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

6. X and Y are partners in a firm sharing profits and losses in the ratio of 3 : 2. Z is admitted as partner with 1/4 share in profit. Z acquires his share from X and Y in the ratio of 2 : 1.
Calculate new profit-sharing ratio.

The solution of Question 06 Chapter 6 of +2-A

Old Ratio of X and Y

3 : 2

Z is admitted for 1/4th Share in Profits
sacrificing Ratio of X and Y is 2 : 1
In this case we have to calculate the sacrificing share of both partners with the following formula and then subtract this share from the profit share of old partners: –

Sacrificing Share of Old Partners = New Partner’s Share X Sacrificed Ratio

X Sacrificing Share	=	1	X	2
		4		3

	=	2
		12

Y Sacrificing Share	=	1	X	1
		4		3

	=	1
	=	12

New Ratio of Old Partners = Old Ratio – Sacrificed Ratio

X New Profit Share	=	3	–	2
		5		12

	=	36 – 10
	=	60

	=	26
	=	60

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Y New Profit Share	=	2	–	1
		5		12

	=	24 – 5
	=	60

	=	19
	=	60

Z’s Share	=	1	X	15
		4		15

	=	15
	=	60

New Profit sharing Ratio between All partners

26 : 19 : 15

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T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
Chapter No. 3 – Goodwill: Nature and Valuation
Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
Chapter No. 5 – Admission of a Partner
Chapter No. 6 – Retirement/Death of a Partner
Chapter No. 7 – Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Chapter No. 8 – Company Accounts – Accounting for Share Capital
Chapter No. 9 – Company Accounts – Issue of Debentures
Chapter No. 10 – Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

Chapter No. 1 – Financial Statements of a Company
Chapter No. 2 – Financial Statement Analysis
Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
Chapter No. 4 – Accounting Ratios
Chapter No. 5 – Cash Flow Statement

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