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Dear Student,
Working Notes:
Amount C receives as a Manager
Amount C should receive as a Partner
Profit = 59,000 + 62,600 - 4,000 + 78,000 = 1,95,600
Now, C as a Partner, will get interest on capital of 4,800 (as calculated above) and therefore firm's profits will get reduced by that amount. Secondly, the firm will no longer have to pay him 43,200 (i.e. the amount payable to him as a manager). And so, by this amount the firm's profit will increase.
Net Adjusted Profit = 1,95,600 - 4,800 + 43,200 = 2,34,000 (1/6 of this figure will be C's share in Profit)
Extra amount Payable to C as a Partner = 43,800 - 43,200 = 600 (to be compensated by A and B in 3 : 2)
| Journal | |||||
| Date | Particulars | L.F. | Debit Amount (Rs) |
Credit Amount (Rs) |
|
| A’s Capital A/c | Dr. | 360 | |||
| B’s Capital A/c | Dr. | 240 | |||
| To C’s Capital A/c | 600 | ||||
| (A and B compensated C in 3 : 2) | |||||
Working Notes:
Amount C receives as a Manager
Amount C should receive as a Partner
Profit = 59,000 + 62,600 - 4,000 + 78,000 = 1,95,600
Now, C as a Partner, will get interest on capital of 4,800 (as calculated above) and therefore firm's profits will get reduced by that amount. Secondly, the firm will no longer have to pay him 43,200 (i.e. the amount payable to him as a manager). And so, by this amount the firm's profit will increase.
Net Adjusted Profit = 1,95,600 - 4,800 + 43,200 = 2,34,000 (1/6 of this figure will be C's share in Profit)
Extra amount Payable to C as a Partner = 43,800 - 43,200 = 600 (to be compensated by A and B in 3 : 2)
