Question

7. EK, FK and GK are partners sharing profits in the ratio of 7:6:5. Their fixed capitals are Rs. 1,40,000; Rs.80,000 and Rs.1,60,000 respectively. It is now decided that the total capital of the firm should be Rs.7,20,000 and should be in the profit sharing ratio of the partners. Calculate the amount of capital to be contributed by the individual partners and record necessary journal entry for the same,​

Answer 1

Answer:

Cash A/c Dr 3,40,000

To EK's Capital A/c 1,40,000

To FK's Capital A/c 1,60,000

To GK's Capital A/c 40,000

Explanation:

As it is mentioned that the new capital will be 7,20,000 and in their PSR

divide it accordingly first

7,20,000

EK- 7,20,000×7/18 = 2,80,000

FK- 7,20,000×6/18 = 2,40,000

GK- 7,20,000×5/18 = 2,00,000

Amount of capital to be brought in by each partner

= amount as per new capital - amount as per existing

EK - 2,80,000 - 1,40,000 = 1,40,000

FK - 2,40,000 - 80,000 = 1,60,000

HK - 2,00,000 - 1,60,000 = 40,000

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