A,B,C and D are in partnership sharing profits and losses in the ratio of 36:24:20:20
respectively. E joins the partnership for 20% share. Calculate the new profit-sharing ratio after E's admission.
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12th
Accountancy
Reconstitution of a Partnership Firm - Admission of a Partner
Accounting Treatment of Accumulated Profits and Losses and Reserves
A, B, C and D are in partne...
ACCOUNTANCY
Asked on December 26, 2019 byGurvinder Potnuru
A,B,C and D are in partnership sharing profits and losses in the ratio of 36:24:20:20 respective E joins the partnership for 20% share and A,B,C and D in future would share profits among themselves as 3/10:4/10:2/10:1/10. Calculate new profit sharing ratio after E′s admission.
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A's old share= 36/100
B's old share= 24/100
C's old share= 20/100
D's old share= 20/100
E is admitted for 20/100th share
Remaining share= 1-[20/100]
= 80/100
New ratio among partners should be 3:4:2:1
A's new share= 3/10 * 80/100
= 24/100
B's new share= 4/10 * 80/100
= 32/100
C's new share= 2/10 * 80/100
= 16/100
D's new share= 1/10 * 80/100
= 8/100
New profit sharing ratio= 24:32:16:8:20
= 6:8:4:2:5