Question

Balance Sheet of J and K who share profits in the ratio of 3 : 2 is as follows:

M joins the firm 1st April, 2019 for half share in the future profis. He is to pay RS.1,00,000 for goodwill and RS.3,00,000 for capital. Draft the Journal entries and prepare Balance Sheet in each of the following cases:
(a) If M acpuires his share of profit from the firm in the profits-sharing rartios of the partners.
(b) If M acquires his share of profit the firm in equal proportions from the original parters.
(c) If M acquires his share of profit in the ratio of 3 : 1 from the original partners, ascertain the future profit-sharing ratio of the partners in each case.

Answer 1

Capital A/cs: Case (a): J-RS.2,70,000, K-RS.1,80,000, M-RS.3,00,000.
Case (b): -J-RS.2,60,000,K-RS.1,90,000, M-RS.3,00,000.
Case (c): J-RS.2,85,000, K-RS.1,65,000, M-RS.3,00,000.
Balance Sheet Total in each case-RS.7,50,000.
New Profit-sharing Ratio: Case (a) 3 : 2 : 5, (b) 7 : 3 : 10, (c) 9 : 11 : 20.