Adjustment of capitals on admission of a new partner.

Ram ­Shyam are partners in a firm sharing profit &losses in the ratio of 3:2. Damru is admitted to the partnership with 25% share. The firm decides that the capital contribution be in profit sharing ratio. If Damru brings RS 25000 as his capital, what is the capital of shyam-
a)RS.45000/- B)RS 25000 C)RS 30000 D)35000/-

asked Mar 19, 2015 in Partnership-Admission by pooja j (233 points) 2,606 views

1 Answer

0 votes
Damru brings Rs.25000 for his 1/4 share, then full capital of the firm should be = Rs.25000 X 4 = Rs.100000

Out of total capital of Rs.100000, Rs.75000 should be the sum of capitals of Ram and Shyam in the ratio 3:2 because even after Damru's admission profit sharing ratio between Ram and Shyam does not change.

Ram's Capital = Rs.75000 X 3/5 = Rs.45000

Shyam's Capital = Rs.75000 X 2/5 = Rs.30000.  So, option C is most appropriate.
answered Mar 20, 2015 by jbsclasses (3,971 points)