Partnership

Admission

Medium

A, B and C are partners in a firm sharing profits in the ratio of 3:2:1. D is admitted into the firm for 1/4th share in profits, which he gets as 1/8th from A and 1/8th from B. The total capital of the firm is agreed upon as Rs. 1,20,000 and D is to bring in cash equivalent to 1/4th of this amount as his capital. The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. The capitals of A, B and C after all adjustments are Rs. 40,000, Rs. 35,000 and Rs. 30,000 respectively.

Required capitals of all partners is:

A = Rs. 40,000 B = Rs. 20,000 C = Rs. 25,000 D = Rs.35,000

A = Rs. 45,000 B = Rs. 25,000 C = Rs. 20,000 D = Rs.30,000

A = Rs. 35,000 B = Rs. 25000 C = Rs. 30,000 D = Rs.30,000

A = Rs. 55,000 B = Rs. 25000 C = Rs. 15,000 D = Rs.25,000

✅ Correct Option: 2

Finding the new profit sharing ratio:

Old ratio of A:B:C = 3:2:1

A's old share = $\frac{3}{6}$ , B's old share = $\frac{2}{6}$ , C's old share = $\frac{1}{6}$

D is admitted for $\frac{1}{4}$ share, getting $\frac{1}{8}$ from A and $\frac{1}{8}$ from B.

New shares:

A = $\frac{3}{6} - \frac{1}{8} = \frac{12}{24} - \frac{3}{24} = \frac{9}{24}$
B = $\frac{2}{6} - \frac{1}{8} = \frac{8}{24} - \frac{3}{24} = \frac{5}{24}$
C = $\frac{1}{6} = \frac{4}{24}$ (unchanged)
D = $\frac{1}{4} = \frac{6}{24}$

New profit sharing ratio = A:B:C:D = 9:5:4:6

Calculating required capitals:

Total capital of firm = Rs. 1,20,000

Since capitals need to be adjusted in the new profit sharing ratio:

Required capital of A = $\frac{9}{24} \times 1,20,000$ = Rs. 45,000

Required capital of B = $\frac{5}{24} \times 1,20,000$ = Rs. 25,000

Required capital of C = $\frac{4}{24} \times 1,20,000$ = Rs. 20,000

Required capital of D = $\frac{6}{24} \times 1,20,000$ = Rs. 30,000

The information about actual capitals (Rs. 40,000, Rs. 35,000, Rs. 30,000) is given to determine subsequent adjustments, but the question asks for required capitals based on the new profit sharing ratio.

Answer: Option 2

2026: 24 May Shift 1

The partners of a firm decide to change their existing profit sharing ratio. This results in a:

2025: 22 May Shift 2

In the case of guarantee of profit the Sequence of steps to be Followed are.

(A) divide the profit in the given ratio.

(B) prepare profit and loss appropriation account as usual.

(D) find the deficiency.

Choose the correct answer from the options given below:

2025: 31 May Shift 1

A and B are partners in a firm sharing profits in the ratio 2:1. C is admitted into the firm with 1/4th share in profits and he brings Rs. 30,000 as his capital. If the capitals of A and B are to be adjusted in their profit sharing ratio then the capital of A will be-

2025: 26 May Shift 2

A and B are partners in a firm sharing profits in the ratio of 3:2. They admitted M as a new partner for 1/4 share. The new profit sharing ratio between A and B will be 2:1. Calculate their sacrificing ratio.

2026: 31 May Shift 1

Ajay, Bijoy and Payal are partners in a firm sharing profits in the ratio of 3:2:1. Sunil is admitted into the firm for 1/4 share in profits, which he gets as 1/8 from Ajay and 1/8 from Bijoy. The total capital of the firm is agreed upon as Rs. 1,20,000 and Sunil is to bring in cash equivalent to 1/4 of this amount as his capital. The new profit sharing ratio of Ajay, Bijoy, Payal and Sunil will be:

2026: 11 May Shift 2

"When the value of goodwill is not given at the time of admission of a new partner. In such a situation it has to be inferred from the arrangement of the capital and profit sharing ratio."

Identify the method of valuation of goodwill being highlighted in above statement.

Required capitals of all partners is:

Solution

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