A and B who share profit and losses in the ratio of 3 : 2 has the foll...
Calculating Closing Capital of C in Partnership with A and B
Given Data:
- Ratio of profit and losses shared by A and B: 3 : 2
- Capital of A: Rs 50,000
- Capital of B: Rs 30,000
- Reserve Funds: Rs 15,000
- C contributes Rs 25,000 for 1/6th share in the partnership
- C purchases 1/6th share from A and B in the ratio of 3:2 for Rs 25,000
Step 1: Calculate the Total Capital of the Partnership
Total Capital = Capital of A + Capital of B + Reserve Funds
Total Capital = Rs 50,000 + Rs 30,000 + Rs 15,000
Total Capital = Rs 95,000
Step 2: Calculate the Share of A and B in the Partnership
Total Ratio of Profit and Losses = 3 + 2 = 5
Share of A = (3/5) x Total Capital
Share of A = (3/5) x Rs 95,000
Share of A = Rs 57,000
Share of B = (2/5) x Total Capital
Share of B = (2/5) x Rs 95,000
Share of B = Rs 38,000
Step 3: Calculate the Amount Paid by C to A and B
Ratio of Share Purchased by C from A and B = 3 : 2
Total Amount Paid by C = Rs 25,000
Amount Paid to A = (3/5) x Rs 25,000
Amount Paid to A = Rs 15,000
Amount Paid to B = (2/5) x Rs 25,000
Amount Paid to B = Rs 10,000
Step 4: Calculate the New Share of A and B in the Partnership
Share of A after selling 1/6th share = Rs 57,000 - Rs 15,000
Share of A after selling 1/6th share = Rs 42,000
Share of B after selling 1/6th share = Rs 38,000 - Rs 10,000
Share of B after selling 1/6th share = Rs 28,000
Step 5: Calculate the Share of C in the Partnership
Total Share of the Partnership = Share of A + Share of B + Share of C
Total Share of the Partnership = Rs 42,000 + Rs 28,000 + Rs 25,000
Total Share of the Partnership = Rs 95,000
Share of C = (1/6) x Total Share of the Partnership
Share of C = (1/6) x Rs 95,000
Share of C = Rs 15,833.33
Step 6: Calculate the Closing Capital of C
Closing Capital of C = Share of C - Amount Paid by C
Closing Capital of C = Rs 15,833.33 - Rs 25,000
Closing Capital of C = -Rs 9,166.67 (Negative balance means C has to bring in more capital)
Therefore, the closing capital of C is -Rs 9,166.67 which indicates that C has to bring in more capital to balance the books.