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P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any).
- a)Rs.3,000: Rs.1,500
- b)Rs.6,000: Rs.3,000
- c)NIL
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
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Most Upvoted Answer
P and Q are partners sharing Profits in the ratio of 2:1. R is admitte...
And Q share between themselves?
First, we need to calculate the new profit sharing ratio with the admission of R:
P and Q's old ratio = 2:1
R's new ratio = 1/4
Total ratio = 2 + 1 + 1/4 = 9/4
P's new ratio = (2/9) x 4 = 8/9
Q's new ratio = (1/9) x 4 = 4/9
R's ratio = 1/4
Now, we can calculate the amount of goodwill paid by R:
Goodwill paid by R = Rs. 9,000
Half of goodwill to be withdrawn by P and Q = Rs. (9,000/2) = Rs. 4,500
R's capital contribution = Rs. 20,000 for 1/4 share
Therefore, the total capital of the partnership after R's admission = Rs. (20,000 x 4) = Rs. 80,000
Let the total profit of the partnership be x. Then, we can write:
P's share = (8/9) x (x - 4,500)
Q's share = (4/9) x (x - 4,500)
R's share = (1/4) x x = x/4
Total profit = P's share + Q's share + R's share
x = (8/9)(x - 4,500) + (4/9)(x - 4,500) + (1/4)x
Solving for x, we get x = Rs. 31,500
Now, we can calculate each partner's share of the profit:
P's share = (8/9) x (31,500 - 4,500) = Rs. 24,000
Q's share = (4/9) x (31,500 - 4,500) = Rs. 12,000
R's share = (1/4) x 31,500 = Rs. 7,875
Since half of the goodwill amount is to be withdrawn by P and Q, they can share Rs. 4,500/2 = Rs. 2,250 between themselves.
Therefore, P's total share = Rs. (24,000 + 2,250) = Rs. 26,250
Q's total share = Rs. (12,000 + 2,250) = Rs. 14,250
Hence, P and Q can share a total of Rs. 40,500 (Rs. 26,250 + Rs. 14,250) between themselves.
First, we need to calculate the new profit sharing ratio with the admission of R:
P and Q's old ratio = 2:1
R's new ratio = 1/4
Total ratio = 2 + 1 + 1/4 = 9/4
P's new ratio = (2/9) x 4 = 8/9
Q's new ratio = (1/9) x 4 = 4/9
R's ratio = 1/4
Now, we can calculate the amount of goodwill paid by R:
Goodwill paid by R = Rs. 9,000
Half of goodwill to be withdrawn by P and Q = Rs. (9,000/2) = Rs. 4,500
R's capital contribution = Rs. 20,000 for 1/4 share
Therefore, the total capital of the partnership after R's admission = Rs. (20,000 x 4) = Rs. 80,000
Let the total profit of the partnership be x. Then, we can write:
P's share = (8/9) x (x - 4,500)
Q's share = (4/9) x (x - 4,500)
R's share = (1/4) x x = x/4
Total profit = P's share + Q's share + R's share
x = (8/9)(x - 4,500) + (4/9)(x - 4,500) + (1/4)x
Solving for x, we get x = Rs. 31,500
Now, we can calculate each partner's share of the profit:
P's share = (8/9) x (31,500 - 4,500) = Rs. 24,000
Q's share = (4/9) x (31,500 - 4,500) = Rs. 12,000
R's share = (1/4) x 31,500 = Rs. 7,875
Since half of the goodwill amount is to be withdrawn by P and Q, they can share Rs. 4,500/2 = Rs. 2,250 between themselves.
Therefore, P's total share = Rs. (24,000 + 2,250) = Rs. 26,250
Q's total share = Rs. (12,000 + 2,250) = Rs. 14,250
Hence, P and Q can share a total of Rs. 40,500 (Rs. 26,250 + Rs. 14,250) between themselves.
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P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4thshare and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any).a)Rs.3,000: Rs.1,500b)Rs.6,000: Rs.3,000c)NILd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4thshare and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any).a)Rs.3,000: Rs.1,500b)Rs.6,000: Rs.3,000c)NILd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4thshare and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any).a)Rs.3,000: Rs.1,500b)Rs.6,000: Rs.3,000c)NILd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4thshare and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any).a)Rs.3,000: Rs.1,500b)Rs.6,000: Rs.3,000c)NILd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4thshare and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any).a)Rs.3,000: Rs.1,500b)Rs.6,000: Rs.3,000c)NILd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4thshare and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any).a)Rs.3,000: Rs.1,500b)Rs.6,000: Rs.3,000c)NILd)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4thshare and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash can P & Q withdraw from the firm (if any).a)Rs.3,000: Rs.1,500b)Rs.6,000: Rs.3,000c)NILd)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
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