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Anju and Manju are partners sharing profits in the ratio of 2:1. Sanju is admitted into the firm for 1/4 share of profits. Sanju brings in Rs.20,000 in respect of his capital. The capitals of old partners Anju and Manju, after all adjustments relating to goodwill, revaluation of assets and liabilities etc., are Rs.45.0 and Rs.15,000 respectively. It is agreed that partners capitals should be according to the new profit sharing ratio.Determine the new capitals of Anju and Manju and record the necessary journal entries assuming that the partner whose capital falls short, brings in the amount of deficiency and the partner who has an excess, withdraws the excess amount. |
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Answer» New ratio = Balance share x old ratio Anju’s new share = \(\frac{3}{4} \times \frac{2}{3} = \frac{6}{12}\) Manju’s new share = \(\frac{3}{4} \times \frac{1}{3} = \frac{3}{12}\) Sanju’s share of profit = \(\frac{1}{4} = \frac{3}{12}\) New ratio = 6:3:3 = 2:1:1 Total capital of the new firm = 20,000 x \(\frac{4}{1}\) = 80,000 Anju’s new capital = 80,000 x \(\frac{2}{4}\) = 40,000 Manju’s new capital = 80,000 x \(\frac{1}{4}\) = 20,000 The existing capital of Anju = 45000 Excess (Anju) = 5000 The existing capital of maju = 15,000 Journal Entries Deficit (Maju) = 5000
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