Question

Pass
3. A and B are partners sharing profits and losses in the ratio of 7:5. They admit C, their Manager, into
partnership who is to get 1/6th share in the business. C brings in 7 10,000 for his capital and 3,600 for
the 1/6th share of goodwill which he acquires 1/24th from A and 1/8th from B. Profit for the first year
of the new partnership was 24,000. Pass necessary Journal entries for C's admission and apportion the
profit between the partners.
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Answer 1

Answer:

c=1/6 remaining share =5/6

A =5/6×7/12=35/72

B=5/6×5/12=25/72

New profit sharing ratio

A:B:C

=35/72:25/72:1/6

=35:25:12