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Standard XII

Accountancy

Accounting for Goodwill

A and B are p...

Question

A and B are partners sharing profits and losses in the proportion of 7 : 5. They agree to admit C, their manager, into partnership who is to get 1/6th share in the profits. He acquires this share as 1/24th from A and 1/8th from B. Calculate new profit-sharing ratio.

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Solution

C admits for 1/6 share of profit

A sacrifices his share of profit in favour of C

B sacrifices his share of profit in favour of C

New Ratio = Old Ratio − Sacrificing Ratio

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Similar questions

A

and

B

are partners sharing profits and losses in the proportion of

7 : 5

. They agree to admit

C

, their manager, into partnership who is to get

1 / 6^{t h}

share in the profit. He acquires this share as

1 / 24^{t h}

from

A

and

1 / 8^{h t}

from

B

. Calculate new profit-sharing ratio.

A

and

B

are partners sharing profits and losses in the proportion of

7 : 5

. They agree to admit

C

, their Manager, into partnership who is to get

1 / 6^{t h}

share in the business.

C

brings in

R s . 10, 000

for his capital and

R s . 3, 600

for the

1 / 6^{t h}

share of goodwill which he acquire

1 / 24^{t h}

from

A

and

1 / 8^{t h}

from

B

. The profits for the first year of the new partnership amount to

R s . 24, 000

. Pass necessary journal entries in connection with

C^{'} s

admission and apportion the profits between the partners.

Q. A and B are partners sharing profits and losses in the ratio of 7 : 5. They admit C, their Manager, into partnership who is to get 1/6th share in the business. C brings in ₹ 10,000 for his capital and ₹ 3,600 for the 1/6th share of goodwill which he acquires 1/24th from A and 1/8th from B. Profits for the first year of the new partnership was ₹ 24,000. Pass necessary Journal entries for C's admission and apportion the profit between the partners.

Q. P and Q are partners sharing profits in the ratio of 3 : 2. They admit R into partnership who acquires 1/5th of his share from P and 4/25th share from Q. Calculate New Profit-sharing Ratio and Sacrificing Ratio.

(a) A and B are partner sharing profits in the ratio of 7 : 3. C was admitted with $\frac{3}{7} t h$ share in the profit which he took $\frac{2}{7} t h$ from A and $\frac{1}{7} t h$ from B. Calculate new ratio of partners.

(b)Ram and Shyam are partners in a firm sharing profits in the ratio of 7 : 5. Mohan is admitted on $\frac{1}{6} t h$ share which he takes $\frac{1}{24} t h$ from Ram and $\frac{1}{8} t h$ from Shyam. Calculate the new profit sharing ratio of the partners.

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A and B are partners sharing profits and losses in the proportion of 7 : 5. They agree to admit C, their manager, into partnership who is to get 1/6th share in the profits. He acquires this share as 1/24th from A and 1/8th from B. Calculate new profit-sharing ratio.

C admits for 1/6 share of profit A sacrifices his share of profit in favour of C B sacrifices his share of profit in favour of C New Ratio = Old Ratio − Sacrificing Ratio

C admits for 1/6 share of profit

A sacrifices his share of profit in favour of C

B sacrifices his share of profit in favour of C

New Ratio = Old Ratio − Sacrificing Ratio