Question 17 Chapter 5 of +2-A
17. A and B are in partnership sharing profits and losses as 3 : 2. C is admitted for 1/4th share. Afterwards D enters for 20 paise in the rupee. Compute profit-sharing ratio of A, B, C and D after D’s admission
The solution of Question 17 Chapter 6 of +2-A
| Old Ratio of A and B | = | 3 : 2 |
C’s admitted for 1/4 share of profit
Let the combined share of profit of all partners be = 1
Combined share of A and B after C’s admission = 1 − C’s share
| Remaining share | = | 1 | – | 1 |
| 4 |
| = | 4 – 1 | |
| 4 |
| = | 3 | |
| 4 |
New Ratio = Old Ratio × Combined share of A and B
| A’s New Ratio | = | 3 | X | 3 |
| 5 | 4 |
| = | 9 | |
|
| 20 |
| B’s New Ratio | = | 2 | X | 3 |
| 5 | 4 |
| = | 6 | |
| 20 |
New profit Share ratio after C admission
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| A : B : C | = | 9 | : | 6 | : | 1 |
| 20 | 20 | 4 |
| = | 9 : 6 : 4 | |
| 20 | ||
| = | 9 : 6 : 4 |
Profit sharing ratio after C’s admission will become old ratio to determine the ratio after D’s admission
| Old Ratio of A , B and C | = | 9 : 6 : 5 |
D’s admitted for 20/100 share of profit
Let the combined share of profit of all partners be = 1
Combined share of A and B after C’s admission = 1 − D’s share
| Remaining share | = | 1 | – | 20 |
| 100 |
| = | 100 -20 | |
| 100 |
| = | 80 | |
| 100 |
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New Ratio = Old Ratio × Combined share of A, B, and C
| A’s New Ratio | = | 9 | X | 80 |
| 20 | 100 |
| = | 72 | |
| 200 |
| B’s New Ratio | = | 6 | X | 80 |
| 20 | 100 |
| = | 48 | |
| 200 |
| C’s New Ratio | = | 5 | X | 80 |
| 20 | 100 |
| = | 40 | |
| 200 |
New profit Share ratio after D admission
| A : B : C | = | 72 | : | 48 | : | 40 | : | 20 |
| 200 | 200 | 200 | 100 |
| = | 72 : 48 : 40 40 | |
| 200 | ||
| = | 72 : 48 : 40 : 40 |
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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