Illustration of change in profit sharing ratio, Financial Accounting

Illustration of change in profit sharing ratio

A, B and C have been trading as equal partners having capital contributions of £400,000, £300,000 and £200,000 respectively. They deaded to change their profit sharing ratio to 3:2:1. Goodwill was agreed at £150,000.

Required:

Prepare their capital accounts to show their new capital balances assuming that goodwill in not to be retained in the accounts.

Capital account

 

A

B

C

 

A

B

C

Goodwill

75,000

50,000

25,000

Bal. b/d

400,000

300,000

200,000

Bal. c/d

375,000

300,000

225,000

Goodwill

  50,000

  50,000

  50,000

 

450,000

350,000

250,000

 

450,000

350,000

250,000

Posted Date: 12/11/2012 6:08:35 AM | Location : United States







Related Discussions:- Illustration of change in profit sharing ratio, Assignment Help, Ask Question on Illustration of change in profit sharing ratio, Get Answer, Expert's Help, Illustration of change in profit sharing ratio Discussions

Write discussion on Illustration of change in profit sharing ratio
Your posts are moderated
Related Questions
Tool Belt Store (TBS) is expanding its chain of hardware stores across the country. TBS has more than 5,000 full-time employees and more than 20,000 part-time employees. TBS recent

Q. Design a organisational strategy? The objectives to which organisational approach relates depend on the relative power of different stakeholders associated with the company

Indicate by check mark ("9") or "X" which accounts are found on the income statement and which accounts are found on the balance sheet.   Account Name In

THE INCOME STATEMENT It shows the financial performance of the company during the given financial period. It discloses the income and expenses and thus the net profit for the per

A of Surat consign goods to B of Jaipur to be sold at or above invoice price. B is entiled to get a commission of 8% on sales at invoice price plus 25% of any surplus price reali

Can you show me how to solve these problems? PLEASE!!! I can't figure out how to solve these. :-( 1.Briarcrest Condiments is a spice-making firm. Recently, it developed a new

what managers should know about internal rate of return (IRR) and why?

what are methods of calculating depreciation?

THE SURPLUS CAPITAL METHOD Under this method, the initial amounts repaid to partners are in order to reduce their capitals to amounts such that these are now in the same ratio

Can I send you my homework?