Accountancy

R, S and M are partners sharing profits in the ratio of 2/5, 2/5 and 1/5. M decides to retire from the business and his share is taken by R and S in the ratio of 1 : 2. Calculate the new profit-sharing ratio.

SOLUTION Old Ratio (R, S and M) = 2: 2 : 1M retires from the firm.His profit share = 1/5M’s share taken by R and S in ratio of 1 : 2Share taken by R = 1/5 × 1/3…

Continue ReadingR, S and M are partners sharing profits in the ratio of 2/5, 2/5 and 1/5. M decides to retire from the business and his share is taken by R and S in the ratio of 1 : 2. Calculate the new profit-sharing ratio.

From the following particulars, calculate new profit-sharing ratio of the partners: (a) Shiv, Mohan and Hari were partners in a firm sharing profits in the ratio of 5 : 5 : 4. Mohan retired and his share was divided equally between Shiv and Hari. (b) P, Q and R were partners sharing profits in the ratio of 5 : 4 : 1. P retires from the firm.

SOLUTION (a)Old Ratio (Shiv, Mohan and Hari) = 5 : 5 : 4Mohan’s Profit Share = 5/14His share is divided between Shiv and Hari equally i.e., in the ratio of =1: 1 Share of mohan taken by shiv…

Continue ReadingFrom the following particulars, calculate new profit-sharing ratio of the partners: (a) Shiv, Mohan and Hari were partners in a firm sharing profits in the ratio of 5 : 5 : 4. Mohan retired and his share was divided equally between Shiv and Hari. (b) P, Q and R were partners sharing profits in the ratio of 5 : 4 : 1. P retires from the firm.

X, Y and Z are partners sharing profits in the ratio of 1/2, 3/10, and 1/5. Calculate the gaining ratio of remaining partners when Y retires from the firm.

SOLUTION Calculation of Gaining RatioX: Y: Z Old Ratio = 1/2: 3/10: 1/5 = 5: 3: 2/10New Ratio after Y's retirement = 5: 2Gaining Share = New Share – Old ShareX's Gain…

Continue ReadingX, Y and Z are partners sharing profits in the ratio of 1/2, 3/10, and 1/5. Calculate the gaining ratio of remaining partners when Y retires from the firm.

A and B are partners sharing profits in the ratio of 3 : 2. They admit C as a new partner from 1st April, 2019. They have decided to share future profits in the ratio of 4 : 3 : 3. The Balance Sheet as at 31st March, 2019 is given below:

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)A's Capital - 1,76,000 Goodwill34,000B's Capital -  2,54,0004,30,000    Land and Building60,000Workmen Compensation Reserve20,000Investment (Market value Rs. 45,000)50,000Investments Fluctuation Reserve 10,000 Debtors - 1,00,000Employee's Provident Fund34,000Less: Provision for Doubtful Debts - (10,000)90,000 C's Loan3,00,000Stock3,00,000 Bank Balance2,50,000 Advertising…

Continue ReadingA and B are partners sharing profits in the ratio of 3 : 2. They admit C as a new partner from 1st April, 2019. They have decided to share future profits in the ratio of 4 : 3 : 3. The Balance Sheet as at 31st March, 2019 is given below:

Kalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2019, they admitted Karuna as a new partner for 1/5th share in the profits of the firm. The Balance Sheet of Kalpana and Kanika as on 1st April, 2019 was as follows:

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)Capital A/c : Land and Building               2,10,000Kalpana - 4,80,000Plant2,70,000Kanika - 2,10,0006,90,000Stock2,10,000General Reserve60,000Debtors -  1,32,000Workmen's Compensation Fund1,00,000Less: Provision - (12,000)1,20,000Creditors90,000Cash26,000  1,30,000 9,40,000 9,40,000 It was agreed that:(a) the value of Land…

Continue ReadingKalpana and Kanika were partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2019, they admitted Karuna as a new partner for 1/5th share in the profits of the firm. The Balance Sheet of Kalpana and Kanika as on 1st April, 2019 was as follows:

Following is the Balance Sheet of X and Y as at 31st March, 2019. Z is admitted as a partner on that date when the position of X and Y was:

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)X's Capital - 10,000Cash in Hand     9,000  Y's Capital - 8,00018,000Debtors11,000Creditors12,000Stock12,000General Reserve16,000Building8,000Workmen Compensation Reserve4,000Machinery10,000 50,000 50,000 X and Y share profits in the proportion of 3 : 2. The following terms of admission are agreed upon:(a)…

Continue ReadingFollowing is the Balance Sheet of X and Y as at 31st March, 2019. Z is admitted as a partner on that date when the position of X and Y was:

Pradeep and Dhanraj were partners in a firm sharing profits in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2019 was:

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)Creditors30,000Cash4,000Bills Payable1,000Debtors50,000Reserve Fund16,000Less: Provision for Doubtful Debts - 5,00045,000Outstanding Salary3,000 Stock30,000Capital A/c : Bills Receivable10,000Pradeep - 60,000Patents1,000Dhanraj - 20,00080,000Machinery 40,000 1,30,000 1,30,000 They admitted Leander as a new partner on this date. New profit-sharing…

Continue ReadingPradeep and Dhanraj were partners in a firm sharing profits in the ratio of 3 : 1. Their Balance Sheet on 31st March, 2019 was:

Mohan and Sohan are in partnership sharing profits in the proportion of 3/5th and 2/5th respectively. Their Balance Sheet as at 31st March, 2019 was:

LiabilitiesAmount (Rs.)AssetsAmount (Rs.)Mohan's Capital - 2,000 Plant650Sohan's Capital - 1,0003,000Cash650Creditors400Debtors1,000  Less: Provision for Doubtful Debts - (400)600 Stock1,500 3,400 3,400 They admit Rohan to a 1/3rd share upon the terms that he is to pay into the business Rs. 1,000…

Continue ReadingMohan and Sohan are in partnership sharing profits in the proportion of 3/5th and 2/5th respectively. Their Balance Sheet as at 31st March, 2019 was: