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Question
A, B, C and D were partners in a firm sharing profits in the ratio of 3 : 4 : 2 : 1. On 31.3.2022, C retired and his share was taken over equally by A and D. Calculate the new profit sharing ratio of A, B and D.
Solution
C's share in profit = `2/10`
C's share acquired by A = `1/2 xx 2/10 = 2/20`
A's new share = `3/10 + 2/20 = (6 + 2)/20 = 8/20`
C's share acquired by D `= 1/2 xx 2/10 = 2/20`
D's new share = `1/10 + 2/20 = (2 + 2)/20 = 4/20`
New profit sharing ratio of A, B and D are
A = `8/20`, B = `4/10 = (4 xx 2)/(10 xx 2) = 8/20`, C = `4/20`
New profit sharing ratio - 8 : 8 : 4 i.e., 2 : 2 : 1.
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
7,000 |
Land and Building | 36,000 | ||
| Bills Payable | 3,000 | Plant and Machinery | 28,000 | ||
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|
Sundry Debtors |
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|
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|
Less: Provision for Doubtful Debts |
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12,000 |
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|
1,06,000 |
1,06,000 |
||||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
21,000 |
Cash at Bank | 5,750 | ||
| Workmen Compensation Reserve |
12,000 |
Debtors |
40,000 |
|
|
| Investments Fluctuation Reserve |
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Less: Provision for Doubtful Debts |
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38,000 |
|
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| Y |
32,000 |
|
Patents | 10,000 | |
| Z |
21,000 |
1,21,000 |
Machinery |
50,000 |
|
| Goodwill | 6,000 | ||||
| Advertisement Expenditure | 5,250 | ||||
|
1,60,000 |
1,60,000 |
||||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Creditors |
10,800 |
Cash at Bank | 13,000 | ||
| Bills Payable |
5,000 |
Debtors |
10,000 |
|
|
| Capital A/cs: |
|
Less: Provision for Doubtful Debts |
200 |
9,800 |
|
| A | 45,000 | Stock | 9,000 | ||
| B |
30,000 |
|
Machinery | 24,000 | |
| C |
15,000 |
90,000 |
Freehold Premises |
50,000 |
|
|
1,05,800 |
1,05,800 |
||||
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
| Sundry Creditors |
12,600 |
Bank | 4,100 | ||
| Provident Fund |
3,000 |
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30,000 |
|
|
| General Reserve |
9,000 |
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29,000 |
|
| Capital A/cs: |
|
|
|||
|
Amit |
40,000 | Stock | 25,000 | ||
|
Balan |
36,500 | Investments | 10,000 | ||
|
Chander |
20,000 |
96,500 |
Patents |
5,000 |
|
|
|
|
Machinery |
48,000 |
||
|
1,21,100 |
1,21,100 |
||||
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(vi) Amit and Balan decided to adjust their capitals in proportion of their profit-sharing ratio by opening Current Accounts.
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| Liabilities | ₹ | Assets | ₹ | |
| Creditors | 50,000 | Cash at Bank | 40,000 | |
| Employees' Provident Fund | 10,000 | Sundry Debtors | 1,00,000 | |
| Profit and Loss A/c | 85,000 | Stock | 80,000 | |
| Capital A/cs: | Fixed Assets | 60,000 | ||
| X | 40,000 | |||
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| 2,80,000 | 2,80,000 | |||
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| Liabilities | Amount (₹) |
Assets | Amount (₹) |
||
| Sundry Creditors | 18,000 | Goodwill | 12,000 | ||
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|
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|
Liabilities |
Amount (₹) |
Assets |
Amount (₹) |
||
|
Trade Creditors |
1,20,000 |
Cash at Bank |
1,80,000 |
||
|
Bills Payable |
80,000 |
Stock |
1,40,000 |
||
|
General Reserve |
60,000 |
Sundry Debtors | 80,000 | ||
|
Capital A/cs: |
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| X |
7,00,000 |
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| Z |
60,000 |
14,60,000 |
|||
|
17,20,000 |
17,20,000 |
||||
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Assets | Amount (₹) |
||
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|
Liabilities |
Amount |
Assets |
Amount |
|
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||
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BALANCE SHEET OF SURESH, RAMESH, MAHESH AND Ganesh
as on 1st April, 2016
| Liabilities | Amount (₹) |
Assets | Amount (₹) |
|
| Capital A/cs: | Fixed Assets | 6,00,000 | ||
| Suresh | 1,00,000 | Current Assets | 3,45,000 | |
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| Mahesh | 2,00,000 | |||
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| 9,45,000 | 9,45,000 | |||
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For the following particulars, calculate the new profit-sharing of the partners.
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