Question

Pinky, Qumar and Roopa partners in a firm sharing profits and losses in the ratio of 3:2:1. S is admitted as a new partner for 1/4 share in the profits of the firm, whichs he gets 1/8 from Pinky, and 1/16 each from Qmar and Roopa. The total capital of the new firm after Seema’s admission will be Rs 2,40,000. Seema is required to bring in cash equal to 1/4 of the total capital of the new firm. The capitals of the old partners also have to be adjusted in proportion of their profit sharing ratio. The capitals of Pinky, Qumar and Roopa after all adjustments in respect of goodwill and revaluation of assets and liabilities have been made are Pinky Rs 80,000, Qumar Rs 30,000 and Roopa Rs 20,000. Calculate the capitals of all the partners and record the necessary journal entries for doing adjustments in respect of capitals according to the agreement between the partners?

Answer 1

1) Calculation of new profit sharing Ratio = Old Ratio − Sacrificing Ratio

New profit sharing ratio between Pinky, Qumar, Roopa and Seema

2) Required capital of all partners in the new firm

3) Amount to be brought by each partner

Pinky = 90,000 − 80,000 = 10,000

Qumar = 65,000 − 30,000 = 35,000

Roopa = 25,000 − 20,000 = 5,000

Seema = 2,40,000 =60,000

Books of Pinky, Qumar, Roopa and Seema Journal
Date	Particularss			L.F.	Amount Rs	Amount Rs
	Bank A/c		Dr.		60,000
		To Seema Capital A/c				60,000
	(Seema bring her share of Capital for 1/4 th share of profit)
	Bank A/c		Dr.		50,000
		To Pinky’s Capital A/c				10,000
		To Qumar’s Capital A/c				35,000
		To Roopa’s Capital A/c				5,000
	(Amount brought by Pinky, Qumar and Roopa to make capital equal to their proportion)