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A and b are partners in a firm with the profit sharing ratio 11:4 they admit c as a new partner for 1/5 share in profits he brings 150000 as premium? half of which withdrawan by partners calculate adjusted capital?
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A and b are partners in a firm with the profit sharing ratio 11:4 they...
Adjusted Capital Calculation in a Partnership Firm
Partnership firms distribute profits among the partners as per their agreed profit-sharing ratio. However, when a new partner is admitted or an existing partner withdraws from the firm, the capital accounts of all the partners need to be adjusted. Here is how to calculate the adjusted capital in a partnership firm.
Given Data:
- A and B are partners in a firm with a profit-sharing ratio of 11:4.
- C is a new partner who is admitted for a 1/5 share in profits.
- C brings 150000 as premium, half of which is withdrawn by partners.
Calculation Steps:
1. Calculate the total profit sharing ratio of the firm after the admission of the new partner.
- Total profit sharing ratio = 11 + 4 + 1/5 = 56/5
2. Calculate the share of C in the total profits.
- C's share = (1/5) / (56/5) = 1/56
3. Calculate the total profits of the firm.
- Let the total profits be X.
- Then, A's share = 11/56 X, B's share = 4/56 X, C's share = 1/56 X.
4. Calculate the adjusted capital of A and B after withdrawing half of the premium.
- Let A's capital be A and B's capital be B.
- A = 11/15 (150000/2) + 11/56 X
- B = 4/15 (150000/2) + 4/56 X
5. Calculate the adjusted capital of C after paying the premium.
- Let C's capital be C.
- C = 150000/2 - 150000/5 + 1/56 X
6. Calculate the total adjusted capital of the firm.
- Total adjusted capital = A + B + C
Explanation:
The above calculation steps show how to adjust the capital accounts of the partners in a partnership firm after admitting a new partner and withdrawing the premium. The profit-sharing ratio of the firm is recalculated based on the new partner's share in profits. Then, the total profits of the firm are calculated, and the shares of each partner are determined. Finally, the capital accounts of the partners are adjusted by adding or subtracting the premium and profits as per their agreed ratios. The total adjusted capital of the firm represents the total amount of money that the partners have invested in the business, and it forms the basis for further calculations such as interest on capital, drawings, etc.
Partnership firms distribute profits among the partners as per their agreed profit-sharing ratio. However, when a new partner is admitted or an existing partner withdraws from the firm, the capital accounts of all the partners need to be adjusted. Here is how to calculate the adjusted capital in a partnership firm.
Given Data:
- A and B are partners in a firm with a profit-sharing ratio of 11:4.
- C is a new partner who is admitted for a 1/5 share in profits.
- C brings 150000 as premium, half of which is withdrawn by partners.
Calculation Steps:
1. Calculate the total profit sharing ratio of the firm after the admission of the new partner.
- Total profit sharing ratio = 11 + 4 + 1/5 = 56/5
2. Calculate the share of C in the total profits.
- C's share = (1/5) / (56/5) = 1/56
3. Calculate the total profits of the firm.
- Let the total profits be X.
- Then, A's share = 11/56 X, B's share = 4/56 X, C's share = 1/56 X.
4. Calculate the adjusted capital of A and B after withdrawing half of the premium.
- Let A's capital be A and B's capital be B.
- A = 11/15 (150000/2) + 11/56 X
- B = 4/15 (150000/2) + 4/56 X
5. Calculate the adjusted capital of C after paying the premium.
- Let C's capital be C.
- C = 150000/2 - 150000/5 + 1/56 X
6. Calculate the total adjusted capital of the firm.
- Total adjusted capital = A + B + C
Explanation:
The above calculation steps show how to adjust the capital accounts of the partners in a partnership firm after admitting a new partner and withdrawing the premium. The profit-sharing ratio of the firm is recalculated based on the new partner's share in profits. Then, the total profits of the firm are calculated, and the shares of each partner are determined. Finally, the capital accounts of the partners are adjusted by adding or subtracting the premium and profits as per their agreed ratios. The total adjusted capital of the firm represents the total amount of money that the partners have invested in the business, and it forms the basis for further calculations such as interest on capital, drawings, etc.
Community Answer
A and b are partners in a firm with the profit sharing ratio 11:4 they...
Premium given to a = 150000 x 11/15 = 110000
premium given to b = 150000 x 4/15 = 40000
withdrawal of premium by a = 110000/2 = 55,000
withdrawal of premium by b = 40000/2 = 20000
therefore,
adjusted cap of a = 110000-55000 = 55000
adjusted cap of b = 40000-20000 = 20000
the amount of capital can be added to this to solve it further
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A and b are partners in a firm with the profit sharing ratio 11:4 they admit c as a new partner for 1/5 share in profits he brings 150000 as premium? half of which withdrawan by partners calculate adjusted capital?
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A and b are partners in a firm with the profit sharing ratio 11:4 they admit c as a new partner for 1/5 share in profits he brings 150000 as premium? half of which withdrawan by partners calculate adjusted capital? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A and b are partners in a firm with the profit sharing ratio 11:4 they admit c as a new partner for 1/5 share in profits he brings 150000 as premium? half of which withdrawan by partners calculate adjusted capital? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and b are partners in a firm with the profit sharing ratio 11:4 they admit c as a new partner for 1/5 share in profits he brings 150000 as premium? half of which withdrawan by partners calculate adjusted capital?.
A and b are partners in a firm with the profit sharing ratio 11:4 they admit c as a new partner for 1/5 share in profits he brings 150000 as premium? half of which withdrawan by partners calculate adjusted capital? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about A and b are partners in a firm with the profit sharing ratio 11:4 they admit c as a new partner for 1/5 share in profits he brings 150000 as premium? half of which withdrawan by partners calculate adjusted capital? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and b are partners in a firm with the profit sharing ratio 11:4 they admit c as a new partner for 1/5 share in profits he brings 150000 as premium? half of which withdrawan by partners calculate adjusted capital?.
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