24 :- A and B are in partnership sharing profits and losses in the ratio of 5:3. C is admitted as a partner who pays Rs 40,000 as capital and the necessary amount of goodwill which is valued at Rs 60,000 for the firm. His share of profits will be 1/5th which he takes 1/10th from A and 1/10th from B.
Pass journal entries and also calculate future profit sharing ratio of the partners.
Solution :-
WORKING NOTES :-
(a) Calculation of new profit sharing ratio of partners
A’s new share = 5/8 – 1/10 = 42/80
B’s new share = 3/8 – 1/10 = 22/80
C’s share = 1/5 x 16/16 = 16/80
Therefore, their New PSR is 21:11:8
(b) Calculation of their sacrificing ratio
Old ratio – new ratio
A = 5/8 – 21/40 = 4/40
B = 3/8 – 11/40 = 4/40
Thus, their Sacrificing ratio is 1:1