Question 10 Chapter 5 of +2-A
Table of Contents
10. X and Y were partners sharing profits in the ratio of 3 : 2. They admitted P and Q as new partners. X surrendered 1/3rd of his share in favour of P and Y surrendered 1/4th of his share in favour of Q. Calculate new profit-sharing ratio of X, Y, P and Q.
The solution of Question 10 Chapter 6 of +2-A
| Old Ratio of X and Y | = | 3 : 2 |
| X surrendered his share in the favour of P | = | 1/3th |
| Ysurrendered his share in the favour of Q | = | 1/4th |
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 | = | 3 | – | 1 |
| 5 | 3 |
| = | 3 | |
|
| 15 |
| Y Sacrificing Share | = | 2 | – | 1 |
| 5 | 4 |
| = | 2 | |
| 20 |
New Ratio of Old Partners = Old Ratio – Sacrificed Ratio
| X’s New Profit Share | = | 3 | – | 3 |
| 5 | 15 |
| = | 9 – 3 | |
| 15 |
| = | 6 | |
| 15 |
| Y New Profit Share | = | 2 | – | 2 |
| 5 | 20 |
| = | 8 – 2 | |
| 20 |
| = | 6 | |
| 20 |
| P’s Share | = | X’s Sacrificing |
| = | 3 | |
| 15 |
| Q’s Share | = | Y’s Sacrificing |
| = | 2 | |
| 20 |
| New Profit sharing Ratio between All partners | = | 6 | : | 6 | : | 3 | : | 3 |
| 15 | 20 | 15 | 20 |
| = | 24 : 18 : 12 : 6 | |
| 60 |
| New Profit sharing Ratio between All partners | = | |
| = | 4 : 3 2 : 1 |
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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