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A and B are partnership sharing profits and losses in the ratio of 3:2 . On 1st April, they admitted C into partnership,?
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A and B are partnership sharing profits and losses in the ratio of 3:2...
Admission of C into Partnership
Calculation of New Profit Sharing Ratio
- A and B's profit sharing ratio = 3:2
- C is admitted into the partnership
- The new profit sharing ratio needs to be calculated
New Profit Sharing Ratio:
- Let's assume C's share of profit = x
- A's share of profit = 3x
- B's share of profit = 2x
- Total profit sharing ratio = 3x + 2x + x = 6x
- C's share of profit = 1/6
- A's share of profit = 3/6 = 1/2
- B's share of profit = 2/6 = 1/3
Calculation of C's Capital Contribution
- C's share of profit = 1/6
- C's capital contribution = C's share of profit / C's profit sharing ratio
- C's capital contribution = 1/6 / 1/6 = 1
Adjustment of Capital Accounts
- A and B's capital accounts need to be adjusted to reflect the admission of C
- C's capital contribution of 1 should be added to the capital accounts of A and B
Final Profit Sharing Ratio
- After the admission of C, the new profit sharing ratio is 1:1:1 for A, B, and C respectively
- The partnership will now operate based on this new profit sharing ratio
Calculation of New Profit Sharing Ratio
- A and B's profit sharing ratio = 3:2
- C is admitted into the partnership
- The new profit sharing ratio needs to be calculated
New Profit Sharing Ratio:
- Let's assume C's share of profit = x
- A's share of profit = 3x
- B's share of profit = 2x
- Total profit sharing ratio = 3x + 2x + x = 6x
- C's share of profit = 1/6
- A's share of profit = 3/6 = 1/2
- B's share of profit = 2/6 = 1/3
Calculation of C's Capital Contribution
- C's share of profit = 1/6
- C's capital contribution = C's share of profit / C's profit sharing ratio
- C's capital contribution = 1/6 / 1/6 = 1
Adjustment of Capital Accounts
- A and B's capital accounts need to be adjusted to reflect the admission of C
- C's capital contribution of 1 should be added to the capital accounts of A and B
Final Profit Sharing Ratio
- After the admission of C, the new profit sharing ratio is 1:1:1 for A, B, and C respectively
- The partnership will now operate based on this new profit sharing ratio
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A and B are partnership sharing profits and losses in the ratio of 3:2 . On 1st April, they admitted C into partnership,?
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A and B are partnership sharing profits and losses in the ratio of 3:2 . On 1st April, they admitted C into partnership,? 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 partnership sharing profits and losses in the ratio of 3:2 . On 1st April, they admitted C into partnership,? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partnership sharing profits and losses in the ratio of 3:2 . On 1st April, they admitted C into partnership,?.
A and B are partnership sharing profits and losses in the ratio of 3:2 . On 1st April, they admitted C into partnership,? 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 partnership sharing profits and losses in the ratio of 3:2 . On 1st April, they admitted C into partnership,? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partnership sharing profits and losses in the ratio of 3:2 . On 1st April, they admitted C into partnership,?.
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