Practicing Success
Read the following passage and answer the following question. A, B & C are partners sharing profits in proportion to their capital. A retired from the firm on 1st April 2021 and the remaining partners decided to carry on the partnership with a profit-sharing ratio of 4:3. At the time of retirement, their capital accounts show balance- A- ₹2,00,000, B- ₹3,00,000, and C ₹2,00,000. The assets and liabilities of the partnership firm are as follows- |
Capitals of the firm in total will be the same as before the retirement of A and will be in the new profit-sharing ratio of the continuing partners. What will be the capital of the remaining partner( B & C) respectively? |
₹5,00,000, ₹3,00,000 ₹3,00,000, ₹5,00,000 ₹4,00,000, ₹3,00,000 ₹3,00,000, ₹4,00,000 |
₹4,00,000, ₹3,00,000 |
The correct answer is option 3- ₹4,00,000, ₹3,00,000. Capital of partners = A- ₹2,00,000, B- ₹3,00,000, and C ₹2,00,000 Total capital of the firm = ₹7,00,000 B's capital in new firm = 7,00,000 x 4/7 C's capital in new firm = 7,00,000 x 3/7 |