A-AS Level (CIE) Accounting Paper-3: Specimen Questions with Answers 25 - 25 of 50

Question 25

Question

MCQ▾

X and y share profits in the ratio 3: 1. Their balance sheet as on 31st December 2018, was as under

X and Y Share Profits in the Ratio 3: 1. Their Balance Sheet as on st December 2018, Was as Under
Assets

Cash

Sundry debtors 24000

Less: provision 800

Stock

Fixed Assets

Goodwill

P&L a/c

Total Assets

Liabilities

Outstanding Expenses

Sundry Creditors

Capital Accounts:

X

Y

Total Liabilities

$

7800

23200

5000

80000

8000

16000

1,40, 000

5000

36000

68000

31000

1,40, 000

Z is admitted into the partnership on the following terms-

  • The new profit-sharing ratio of the firm will be 5: 3: 2
  • Z will pay $ 20,000 as capital and the capital of the old partners will be adjusted on the basis of new partner՚s capital and his share in the business, actual amount to be brought in or withdrawn by old partners.
  • After adjustment of goodwill z՚s capital is $ 16000

Calculate the amount of new capital to be shown on the liabilities side of the balance sheet.

Choose the correct option

Choices

Choice (4)

a.

40000,16000 and 20000

b.

42000,22000 and 14000

c.

44000,26000 and 18000

d.

40000,24000 and 16000

Answer

d.

Explanation

The profit-sharing ratio is . Therefore based on z՚s capital, the total capital of the firm will be:

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