Question

A and B are two partners sharing profit and loss equally. Their capital A/c stood at Rs.30,000 and Rs.25,000 respectively on 31st March, 2013. On 1st April C is admitted for 1/3rd share of profit for which he brings Rs.12,000 as his share of goodwill. On the date of his admission, stock was appreciated by Rs.11,000 and provisions for bad debts also increased by Rs.2,000. Old partners decided that C's capital should be in accordance with his share of profit and capital of old partners. What amount C should brings as his share of capital in the firm?

• A. Rs.40,000
• B. Rs.38,000
• C. Rs.36,000
• D. Rs.41,000

Answer 1

The correct option is D Rs.41,000

• A and B are partners sharing profit & losses in a firm with capitals Rs 30000 & Rs 25000 respectively.

On 1st Apr C is admitted for 1/3rd share of profit.

• New Profit sharing ratio = 1 - 1/3 = 2/3

A. 2/3 * 1/2 = 2/6 ; B 2/3 * 1/2 = 2/6 ; C 1/3 * 2/2 = 2/6

1 : 1 : 1.

Profit on Revaluation = 11000 - 2000 = 9000 ( 4500 Each)

Capitals Of Existing Partner (A) = 30000 + 4500 + 6000(goodwill)

= 40500

(B) = 25000 + 4500+ 6000 = 35500

(C) = (A + B) 76000 * 3/2 = 114000

114000 * 1 / 3 = Rs 38000