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Question -

Pinky, Qumar and Roopa partners in a firm sharing profits and losses in the ratio of 3:2:1. S is admitted as a new partner for 1/4 share in the profits of the firm, whichs he gets 1/8 from Pinky, and 1/16 each from Qmar and Roopa. The total capital of the new firm after Seema’s admission will be ₹ 2, 40,000. Seema is required to bring in cash equal to 1/4 of the total capital of the new firm. The capitals of the old partners also have to be adjusted in proportion of their profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all adjustments in respect of goodwill and revaluation of Liabilities and Assets have been made are Pinky ₹ 80,000, Qumar ₹ 30,000 and Roopa ₹ 20,000. Calculate the capitals of all the partners and record the necessary journal entries for doing adjustments in respect of capitals according to the agreement between the partners?



Answer -

1) Calculation of new profit sharing Ratio = Old Ratio − Sacrificing Ratio
 
New profit sharing ratio between Pinky, Qumar, Roopa and Seema
 
2) Required capital of all partners in the new firm
 
3) Amount to be brought by each partner
Pinky = 90,000 − 80,000 = 10,000
Qumar = 65,000 − 30,000 = 35,000
Roopa = 25,000 − 20,000 = 5,000
Seema = 2,40,000 
  
 =60,000

Books of Pinky, Qumar, Roopa and Seema

Journal

 

Date

Particularss

L.F.

Amount

₹

Amount

₹

 

Bank A/c

Dr.

 

60,000

 

 

 

To Seema Capital A/c

 

 

 

60,000

 

(Seema bring her share of Capital for 1/4 th share of profit)

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

50,000

 

 

 

To Pinky’s Capital A/c

 

 

 

10,000

 

 

To Qumar’s Capital A/c

 

 

 

35,000

 

 

To Roopa’s Capital A/c

 

 

 

5,000

 

(Amount brought by Pinky, Qumar and Roopa to make capital

equal to their proportion)

 

 

 

 

 

 

 

 

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