A, B and C are partners in a firm sharing profits in the ratio of . D is admitted into the firm for th share in profits, which he gets as th from A and th from B. The total capital of the firm is agreed upon as and D is to bring in cash equivalent to th of this amount as his capital. The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. The capitals of A, B and C after all adjustments are , and respectively.C will withdraw the capital amount after capital are adjusted in the ratio of their respective shares in profits. The amount is:
- ARs. 20,000
- BRs. 15,000
- CRs. 10,000
- DRs. 5,000
Solution & Step-by-step Explanation
1. Determine C's Required Target Capital:From the new profit sharing ratio , C's share is .
2. Compare with C's Existing Adjusted Balance:
3. Calculate Surplus Capital to Withdraw:
2. Compare with C's Existing Adjusted Balance:
3. Calculate Surplus Capital to Withdraw: