Question 14 Chapter 5 of +2-A
Table of Contents
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
| 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 |
| = | 32 | |
| 100 |
| C’s New Ratio | = | 80 | X | 2 |
| 100 | 10 |
| = | 16 | |
| 100 |
| D’s New Ratio | = | 80 | X | 1 |
| 100 | 10 |
| = | 8 | |
| 100 |
| New Profit sharing Ratio between A, B, C, and D |
= | |
| = | 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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