A and B are partners in a firm sharing profits in the ratio 2:1 . C is admitted into the firm with 1/4th share

Question

A and B are partners in a firm sharing profits in the ratio 2:1 . C is admitted into the firm with 1/4th share in profits and he brings Rs. 30,000 as his capital. If the capitals of A and B are to be adjusted in their profit sharing ratio then the capital of A will be-

Accepted Answer

We can ascertain the total capital of the firm using the new partner's capital contribution as the baseline:C's share =

\frac{1}{4}

C's Capital =

Rs. 30, 000

$

Total Capital of the New Firm = C’s Capital \times \frac{4}{1} = 30, 000 \times 4 = Rs. 1, 20, 000

N o w, l e t^{'} s f in d t h e t o t a l s ha rere mainin g f or A an d B co mbin e d :

Remaining Share = 1 - \frac{1}{4} = \frac{3}{4}

A^{'} s N e wS ha re :

A = \frac{2}{3} \times \frac{3}{4} = \frac{2}{4} = \frac{1}{2}

N o w, l e t^{'} s d e t er min e A^{'} s a d j u s t e d c a p i t a l co n t r ib u t i o n :

Capital of A = Total Capital \times A’s New Share

$

Capital of A = 1, 20, 000 \times \frac{1}{2} = Rs. 60, 000

A and B are partners in a firm sharing profits in the ratio $2 : 1$ . C is admitted into the firm with $\frac{1}{4} th$ share in profits and he brings $Rs. 30, 000$ as his capital. If the capitals of A and B are to be adjusted in their profit sharing ratio then the capital of A will be-

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A and B are partners in a firm sharing profits in the ratio 2:1. C is admitted into the firm with 41​th share in profits and he brings Rs. 30,000 as his capital. If the capitals of A and B are to be adjusted in their profit sharing ratio then the capital of A will be-