P, Q and R were partners in a firm sharing profits in ratio 2:2:1. On 1st January, 2020, P decided to
retire from the firm. S is admitted as a new partner on the same date for 1/4th share of profit. On this
date, Investments appeared at ` 58,000 and Investment Fluctuation Reserve at `20,000 while the market
value of Investment was `48,000. Pass necessary Journal Entry.
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Answer:
Net Profit before charging commission= 110000
Rate of commission= 10%
P's commission = [Rate/100]* Net profit
= 110000 * 10/100
= 11000
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