A,B,C were partner in ratio 4:3:1.B retires,selling his shares of profit to A&C for 6000,3500 being paid by A & 2500 by C .The profit for the year after the retirement of B was 32000 .pass journal & calc.new profit sharing ratio.

  • 2
Since A gives Rs 3,500 to B and C gives 2,500, they gain his share in the same ratio
Which is = 3,500 : 2,500 or 7:5
Now A gains 7/12*3/8 = 7/32
& C gains 5/12*3/8 = 5/32
New PSR :
A = 4/8 + 7/32 = 23/32
C = 1/8 + 5/32 = 9/32

new ratio is 23:9

Journal entry for distributing profit

Profit/loss a/c.......... Dr 32,000
To A's cap A/c..................23,000
To C's cap a/c.................. 9,000
  • -1
What are you looking for?