Accountancy, asked by Sanskarlohani354, 11 months ago

A and B are partners sharing profits and losses in the ratio of 3:1. On Ist Jan. 2017 they admitted C as a new partner for 1/4 share in the profits of the firm. C brings Rs 20,000 as for his 1/4 share in the profits of the firm. The capitals of A and B after all adjustments in respect of goodwill, revaluation of assets and liabilities, etc. has been worked out at Rs 50,000 for A and Rs 12,000 for B. It is agreed that partner’s capitals will be according to new profit sharing ratio. Calculate the new capitals of A and B and pass the necessary journal entries assuming that A and B brought in or withdrew the necessary cash as the case may be for making their capitals in proportion to their profit sharing ratio?

Answers

Answered by kushalgowtham
1

Answer:

New Profit Sharing Ratio

When new partner is admitted he acquires his share in profits from the old partners.

In other words, on the admission of a new partner, the old partners sacrifice a

share of their profit in favour of the new partner. But, what will be the share of

new partner and how he will acquire it from the existing partners is decided

mutually among the old partners and the new partner. However, if nothing is

specified as to how does the new partner acquire his share from the old partners;

it may be assumed that he gets it from them in their profit sharing ratio. In any

case, on admission of a new partner, the profit sharing ratio among the old

partners will change keeping in view their respective contribution to the profit

sharing ratio of the incoming partner. Hence, there is a need to ascertain the newprofit sharing ratio among all the partners. This depends upon how does the new partner acquires his share from the old partners for which there are many possibility.

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