Question

A and B are partners in a firm. On 1st Jan. 2006 C is admitted for a 1/4 share. C brings
in 50,000 as capital. On the date of admission, the general reserve appears at
24,000 and profit and loss account (debit balance) 12,000. C brings in * 15,000 for
his share of goodwill. Assets and liabilities are revalued and the resultant profit is
16,000. On 1st January, 2006, A had a capital of 70,000 and B760,000. Prepare the
capital accounts of A and B after C's admission.​

Answer 1

Answer:

Partners Capital Ac is in the Attachment ;

Go Through it

Working Note :

Sharing Ratio = 2 : 1 : 1

• Goodwill -

A = 15,000 × ⅔ = 10,000

B = 15,000 × ⅓ = 5,000

• Profit And Loss account -

A = 12,000 × ²/4 = 6,000

B = 12,000 × ¼ = 3,000

C = 12,000 × ¼ = 3,000

• Revaluation Profit -

A = 16,000 × ²/4 = 8,000

B = 16,000 × ¼ = 4,000

C = 16,000 × ¼ = 4,000

• General Reserve -

A = 24,000 × ²/4 = 12,000

B = 24,000 × ¼ = 6,000

C = 24,000 × ¼ = 6,000

Capital Balances :

A = 1,06,000

B = 78,000

C = 63,000