X and Y are partners sharing profits and losses in the ratio of 3 : 2. They
admit Z into partnership, Z paying a premium of 1,00,000 for 1/4 share of the profit
while X and Y as between themselves sharing profits and losses equally. Give journal entries
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Solution
Sicne, Z acquires 1/4th of his share from X, it means he acquires 3/4th (i.e., 1-1/4th) of his share from Y.
If 3/4th share of Z 3/16 (Received from Y)
:. Z's share =3/16×4/3=1/4
Calculation of New Share:
Share acquired by Z from X=1/4×1/4=1/16,from Y=3/16
X's New Share =3/5−1/16=(48−5)/80=43/80
Y's New Share =2/5−3/16=(32−15)/80=17/80
Z's Share =1/4or20/80
Thus, New Profit-sharing Ratio of X, Y and Z =43/80:17/80:20/80or43:17:20,
Sacrificing Ratio of X and Y =1/16:3/16or1:3.
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