Answer the next 5 questions from the passage-

A, B and C are partners in a firm sharing profits in the ratio of 3:2:1. D is admitted into the firm for 1/4th share in profits, which he gets as 1/8th from A and 1/8th from B. The total capital of the firm is agreed upon as ₹1,20,000 and D is to bring in cash equivalent to 1/4th of this amount as his capital. The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. The capitals of A, B and C after all adjustments are ₹40,000, ₹35,000 and ₹30,000 respectively.

The capitals of other partners are also to be adjusted in the ratio of their respective shares in profits. A will bring in cash as capital after adjustment amount-

₹5,000

The correct answer is option 2- ₹5,000.

Old ratio = 3:2:1 (A, B & C)
D is admitted into the firm for 1/4th share in profits, which he gets as 1/8th from A and 1/8th from B.

New share = Old share - sacrificed share

New share of A = 3/6 - 1/8
                       = (12-3)/24
                       = 9/24

New share of B = 2/6 - 1/8
                       = (8-3)/24
                       = 5/24

New share of C = 1/6 (same as before)

D's share = 1/4

New ratio = 9/24 : 5/24 : 1/6 : 1/4
               = 9/24 : 5/24 : 4/24 : 6/24
               = 9:5:4:6

A's old capital after all adjustment = 40,000
Total capital of the firm = 1,20,000
A's share in the new capital = 1,20,000 x 9/24
                                         = 45,000

Bring capital as old capital is less than new capital.

Brought of capital = 45,000 - 40,000
                              = 5,000

Journal entry for brought of capital -
  Cash A/c  Dr.         5,000
      To  A’s Capital A/c    5,000
(Amount brought in by A)