Question

B and C are in partnership sharing profit and loss as 3:1. They admit D ss partner in the firm, D pays premium of 15000 for 1/3rd share of profits. As between themselves, B and C agree to share future profit and loss equally. Draft journal entry showing appropriations of the premium money.​

Answer 1

Answer:

D

15000 - - - > 1/3 of profit

B and C

$3x + x = \frac{2}{3} \\ 4x = \frac{2}{3} \\ x = \frac{1}{6}$

Profit share of B

3*1/6 = 1/2

Investment of B

$\frac{15}{b} = \frac{1 \div 3}{2 \div 3} = \frac{1}{2} \\ b = 30000$

Profit share of C

= 1/6

$c = \frac{30000}{3} = 10000$