Partnership_capital adjustment when new partner admision

IPCC 1548 views 2 replies

Hari

student

119 Points Joined August 2010

A&B are partners in the ratio of 3:2. They joined C as a new partner new profit sharing ratio is 7:3:3.

Liabilities: A-40,000, B-2000, General Res-15,000, Creditors-10,000

Assets: Freehold Premises-24,000, Plant-4,000, Stock-33,000, Debtors-12,000, Bank-7,000, P&L-5,000

Goodwill was valued 20,800. C was to bring required premium and Proportionate capital. Capital of A,B as between themselves were also to be adjusted in their profit sharing ratio. Find out new partners capital and premium of goodwill in the new firm.

Please give me answer to the above problem with brief calculation. Revaluation a/c is compulsory or not how to cal. new partner capital. hari.vemula83 @ hotmail.com

Replies (2)

Rohit

CA-Final

1485 Points Joined May 2012

Note : Capital mentioned in Balance Sheet for B is `20,000 and not `2,000

1. Revaluation A/C is not required as there is no revaluation of assests or liabilities.

2. Adjustment entry for Premimum for Goodwill is -

C .... Dr. `4800

To A ....... `1280

To B........ `3520

3. Please check Quetion again I think there is some ommision or mistake in this line " Capital of A,B as between themselves " or anything else is missing about Capital Adjustment....