Question 12 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 12 Chapter 6 of +2-A

Question 12 Chapter 6 of +2-A

12. A, B and C are partners in a firm sharing profits and losses in the ratio of 4 : 3 : 2. B decides to retire from the firm. Calculate new profit-sharing ratio of A and C in the following circumstances:
a If B gives his share to A and C in the original ratio of A and C.
b If B gives his share to A and C in equal proportion.
c If B gives his share to A and C in the ratio of 3 : 1.
d If B gives his share to A only.

 

The solution of Question 12 Chapter 6 of +2-A: –

 

Old Ratio A, B and C = 4 : 3 : 2
B retires from the firm.

His profit share = 3
9

Case a B gives his share to A and C in their original ratio.

Original Share A and C = 4 : 2

Share taken by A = 3 X 4
9 6
  = 12
  54

 

Share taken by C = 3 X 2
9 6
  = 6
  54

New Ratio = Old Ratio + Share acquired from B

A’s New Share = 4 + 12
9 54
  = 24 + 12
54
  = 36
  54

 

C’s New Share = 2 + 6
9 54
  = 12 + 6
54
  = 18
  54

∴ New Profit Ratio A and C = 36 : 18 or 2 : 1

Case b B gives his share to A and C in equal proportion

Share taken by A = 3 X 1
9 2
  = 3
  18

 

Share taken by C = 3 X 1
9 2
  = 3
  18

New Ratio = Old Ratio + Share acquired from B

 

A’s New Share = 4 + 3
9 18
  = 8 + 3
18
  = 11
  18

 

C’s New Share = 2 + 3
9 18
  = 4 + 3
18
  = 7
  18

∴ New Profit Ratio A and C = 11 : 7

Case c B gives his to A and C in the ratio 3 : 1.

Share taken by A = 3 X 3
9 4
  = 9
  36

 

Share taken by C = 3 X 1
9 4
  = 3
  36

New Ratio = Old Ratio + Share acquired from B

A’s New Share = 4 + 9
9 36
  = 16 + 9
36
  = 25
  36

 

C’s New Share = 2 + 3
9 36
  = 8 + 3
36
  = 11
  36

∴ New Profit Ratio A and C = 25 : 11

Case d B gives his share to A only

A’s New Share = A’s Old Share + Share of B = 4 + 3
9 9
  = 7
  9

 

C’s Share = 2
9

∴ New Profit Ratio A and C = 7 : 2

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)

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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2 Book 1 min - Question 12 Chapter 6 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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