Question

C was admitted in a firm with $1/4$th share of the profits of the firm. C contributes Rs. $15,000$ as his capital, A & B are other partners with the profit sharing ratio as $3:2$. Find the required capital of A & B, if capital should be in profit sharing ratio taking C's as base capital : _________.

• A. Rs. $27,000$ and Rs. $16,000$ for A and B respectively
• B. Rs. $27,000$ and Rs. $18,000$ for A and B respectively
• C. Rs. $32,000$ and Rs. $21,000$ for A and B respectively
• D. Rs. $31,000$ and Rs. $26,000$ for A and B respectively

Answer 1

The correct option is B Rs. $27,000$ and Rs. $18,000$ for A and B respectively

Old profit sharing between A and B = 3:2 and,

C is admitted for the 1/4th share in the firm

The new profit sharing ratio between A, B, and C will be:-

A= $\frac{3}{5}\times \frac{3}{4}=\frac{9}{20}$

B=$\frac{2}{5}\times \frac{3}{4}=\frac{6}{20}$

C=$\frac{1}{4}\times \frac{5}{5}=\frac{5}{20}$

Hence, the new profit sharing ratio between A, B, and C = 9:6:5

C contributes ₹15000 towards the firm capital and he is admitted for the 1/4th share. Thus, the total capital of the firm = 15000*4=60000

Thus, the capital contributed by A = $60,000\ast \frac{9}{20}=27,000$

The capital contributed by B = $60,000\ast \frac{6}{20}=18,000$

Thus, the A's capital is ₹27000, B's Capital is ₹18000, and C's Capital is ₹15000