Question 14 Chapter 5 of +2-A - T.S. Grewal 12 Class Part

Question 14 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)

14.A, B, C and D are in partnership sharing profits and losses in the ratio of 36 : 24 : 20 : 20 respectively. E joins the partnership for 20% share and A, B, C and D in future would share profits among themselves as 3/10 : 4/10 : 2/10 : 1/10. Calculate new profit-sharing ratio after E’s admission .

The solution of Question 14 Chapter 6 of +2-A

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Old Ratio of A, B, C and D	=	36 : 24 : 20 : 20
A is admitted for 1/3rd share of profit

Let the total share of the business = 1
Remaining share of A, B and C = Total Share – D’s Share

Remaining share	=	1	–	20
				100

	=	100 – 20
		100

	=	80
	=	100

To Calculate to New Ratio distribute the remaining share in the old ratio of old partners’

New Ratio = Combined share of A, B and C X Old Ratio

A’s New Ratio	=	80	X	3
		100		10

	=	24
		27

B’s New Ratio	=	80	X	4
		100		10

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	=	32
	=	100

C’s New Ratio	=	80	X	2
		100		10

	=	16
	=	100

D’s New Ratio	=	80	X	1
		100		10

	=	8
	=	100

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New Profit sharing Ratio between A, B, C, and D	=	24 : 32 : 16 : 8 :20
	=	6 : 8 : 4 : 2 : 5

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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