E, F and G are partners sharing profits in 7 : 6 : 5 ratio. Their fixed capitals are Rs, 70,000, Rs. 40,000 and Rs. 80,000 respectively. It is now decided that the total capital of the firm should be Rs. 3,60,000 and should be in the profit sharing ratio of the partners. Calculate the amount of capital to be contributed by the individual partners.
SOLUTION
Adjutsment of capital of partners:
Old Capitals = 70,000; 40,000 and 80,000
New Capitals = 1,40,000; 1,20,000 and 1,00,000 (3,60,000 in 7:6:5 ratio)
E’s capital A/c 70,000
F’s capital A/c 80,000
G’s capital A/c20,000