abc are partners sharing profits and losses in 3:2:1. they admit d for 1/4th share in profi and losses and he brought in rs 150000 for his share of goodwill which was credited to capital account of b and c respectively with 125000 and 25000 calculate new profits sharing ratio
Answers
Answer:
see below
Explanation:
Whenever there is a change in the profit sharing ratio of partners, sacrificing ratio of partners is calculated to distribute the share of goodwill among them.
The sacrificing ratio can be calculated using the formula given below:
Oldprofitsharingratio−Newprofitsharingratio
Substitute values in the above equation
A
′
ssacrificingratio=
6
3
−
5
2
=
30
15−12
=
30
3
B
′
ssacrificingratio=
6
2
−
5
2
=
30
10−12
=
30
−2
C
′
ssacrificingratio=
6
1
−
5
1
=
30
5−6
=
30
−1
Share of goodwill for every partner can be calculated using the formula given below
Goodwill
′
sshare=Partner
′
sratio×Goodwillamount
Substitute values in the above equation
A
′
sGoodwillshare=
30
3
×Rs60,000=Rs6,000
B
′
sGoodwillshare=
30
2
×Rs60,000=Rs4,000
C
′
sGoodwillshare=
30
1
×Rs60,000=Rs2,000
Journal entry is recorded in the following way
B
′
scapitala/cDrRs4000
C
′
scapitala/cDrRs2000
ToA
′
scapitala/cRs6000.
Answer:
Sharing of profit ( Old Ratio) = 15000 : 10000 : 5000
Sharing of profit ( New Ratio) = 12000 : 12000 : 6000
Difference - A Cr. 3000 ; B Dr. 2000 ; C Dr. 1000