A and B were partner sharing profits in the ratio of 21:9. C was admitted for9/21 share in the profits . Calculate new profit sharing ratio of the partners.
Answers
Answer:
A and B were partners in a firm sharing profits in the ratio of 3:2. With effect from 1st April, 2020 they agreed to share A and B were partners in a firm sharing profits in the ratio of 3:2. With effect from 1st April, 2020 they agreed to share profits equally. For this purpose , the goodwill of the firm was valued at Rs.30000. A and B were partners in a firm sharing profits in the ratio of 3:2. With effect from 1st April, 2020 they agreed to share profits equally. For this purpose , the goodwill of the firm was valued at Rs.30000. pass journal entry journal entry equally. For this purpose , the goodwill of the firm was valued at Rs.30000. pass journal entry
Given:
The ratio of profit sharing of A and B is 21:9.
To find:
New profit sharing ratio of the new partners.
Solution:
1) The sharing ratio of the profits of A and B is 21:9 and in the simplest form, it is 7:3. Now, the total ratio will be 10.
2) And C joined by the share of 9/21 which is 3/7 means that C has 3rd part and A and B must have 4th part.
3) But in both conditions, the total ratio of A and B must be same in both cases. So we have to make 4 and 10 equal by taking the LCM of it.
- A:B = 7:3 ---------- 10
- C:A,B = 3:4
LCM[4,10] = 20
- {A:B = 7:3 ---------- 10}×2
- {C:A,B = 3:4}×5
- A:B = 14:6 ---------- 10
- C:A,B = 15:20
now,
- A:B:C = 14:6:15