Question

Aadish and Pratham are partners sharing profits and losses in the ratio of 2 : 1. They admitted Tanay as a partner and the new profit sharing ratio was 2 : 1 : 1. Tanay contributed ₹ 1,50,000 as capital.

It was decided to readjust the capitals on the basis of Tanay’s Capital. The capitals of Aadish and Pratham after all adjustments for goodwill and revaluation were ₹ 2,50,000 and ₹ 1,00,000 respectively.

However, at the time of admission, they realise that the profit for the previous year ₹ 90,000 was distributed equally instead of the profit-sharing ratio.

You are required to calculate the amount to be introduced or withdrawn by Aadish and Pratham so that the capitals are in proportion to the new profit-sharing ratio.

Answer 1

	Aadish (₹)	Pratham (₹)
Profit distributed wrongly in 1 : 1	Dr. 45,000	Dr. 45,000
Profit to be distributed in 2 : 1	Cr. 60,000	Cr. 30,000
Net Effect	Cr. 15,000	Dr. 15,000

Final adjusted capital of both the partners
(after rectification of error in profit distribution)

Aadish \[₹2,50,000 + ₹15,000 \text{ (past adjustment)} = ₹2,65,000\], and

Pratham $₹1,00,000 - ₹15,000 \text{ (past adjustment)} = ₹85,000$

Based on Tanay’s Capital, total capital in the firm should be:
$$1,50,000 \times \frac{4}{1} = ₹ 6,00,000$$ 

Capital according to new PSR of 2 : 1 : 1 should be:
Aadish $= \frac{2}{4} \text{ of } 6,00,000 = ₹3,00,000$
Pratham $= \frac{1}{4} \text{ of } 6,00,000 = ₹1,50,000$

Capital to be contributed by:

Aadish $= 3,00,000 - 2,65,000 = ₹35,000$

Pratham $= 1,50,000 - 85,000 = ₹65,000$