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A and B are partners sharing profits in the ratio of 3: 2. C is admitted for 3/4 and for which 30,000 and 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A:B:C will be?
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A and B are partners sharing profits in the ratio of 3: 2. C is admitt...
Understanding the Situation
In this scenario, partners A and B share profits in the ratio of 3:2. When partner C is admitted, they acquire a 3/4 share of the profit, and goodwill is adjusted between the partners.
Goodwill Premium Allocation
- C's admission involves a premium for goodwill.
- A receives 30,000.
- B receives 10,000.
Calculating the Remaining Share
- Total share before C's admission = A's share + B's share = 3 + 2 = 5 parts.
- C is entitled to 3/4 of the profits, meaning A and B must share the remaining 1/4 of the profits.
Determining New Profit Sharing Ratio
1. C's Share:
- C takes 3/4 of the total profits.
2. A and B's Remaining Share:
- Remaining share = 1 - 3/4 = 1/4.
- This share is divided between A and B in their original ratio (3:2).
3. Calculating Shares:
- A's share from the remaining 1/4 = (3/5) * (1/4) = 3/20.
- B's share from the remaining 1/4 = (2/5) * (1/4) = 2/20.
4. Final Shares:
- A's total share = (3/4) + (3/20) = 15/20.
- B's total share = (2/4) + (2/20) = 12/20.
- C's share = 3/4 = 15/20.
New Profit Sharing Ratio
- A : B : C = 15 : 12 : 15
Final Ratio Simplification
- The simplified profit-sharing ratio is 5 : 4 : 5.
This structured approach helps clarify how the admission of partner C affects the profit-sharing dynamics among A, B, and C.
In this scenario, partners A and B share profits in the ratio of 3:2. When partner C is admitted, they acquire a 3/4 share of the profit, and goodwill is adjusted between the partners.
Goodwill Premium Allocation
- C's admission involves a premium for goodwill.
- A receives 30,000.
- B receives 10,000.
Calculating the Remaining Share
- Total share before C's admission = A's share + B's share = 3 + 2 = 5 parts.
- C is entitled to 3/4 of the profits, meaning A and B must share the remaining 1/4 of the profits.
Determining New Profit Sharing Ratio
1. C's Share:
- C takes 3/4 of the total profits.
2. A and B's Remaining Share:
- Remaining share = 1 - 3/4 = 1/4.
- This share is divided between A and B in their original ratio (3:2).
3. Calculating Shares:
- A's share from the remaining 1/4 = (3/5) * (1/4) = 3/20.
- B's share from the remaining 1/4 = (2/5) * (1/4) = 2/20.
4. Final Shares:
- A's total share = (3/4) + (3/20) = 15/20.
- B's total share = (2/4) + (2/20) = 12/20.
- C's share = 3/4 = 15/20.
New Profit Sharing Ratio
- A : B : C = 15 : 12 : 15
Final Ratio Simplification
- The simplified profit-sharing ratio is 5 : 4 : 5.
This structured approach helps clarify how the admission of partner C affects the profit-sharing dynamics among A, B, and C.
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A and B are partners sharing profits in the ratio of 3: 2. C is admitted for 3/4 and for which 30,000 and 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A:B:C will be?
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A and B are partners sharing profits in the ratio of 3: 2. C is admitted for 3/4 and for which 30,000 and 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A:B:C will be? 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 sharing profits in the ratio of 3: 2. C is admitted for 3/4 and for which 30,000 and 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A:B:C will be? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing profits in the ratio of 3: 2. C is admitted for 3/4 and for which 30,000 and 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A:B:C will be?.
A and B are partners sharing profits in the ratio of 3: 2. C is admitted for 3/4 and for which 30,000 and 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A:B:C will be? 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 sharing profits in the ratio of 3: 2. C is admitted for 3/4 and for which 30,000 and 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A:B:C will be? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing profits in the ratio of 3: 2. C is admitted for 3/4 and for which 30,000 and 10,000 are credited as a premium for goodwill to A and B respectively. The new profit sharing ratio of A:B:C will be?.
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