Question

If new partner brings in proportionate capital, how can it be calculated? Give a suitable example.

Answer 1

When a new partner brings in proportionate capital, the capital contributed by the new partner is calculated based on the agreed profit-sharing ratio between the old partners and the new partner. The new partner’s contribution should be such that their capital corresponds to the percentage of profit they will receive.

Example:

Total capital before admission: ₹ 3,00,000

New partner’s share: 20%

The new partner’s capital = `3,00,000 xx 20/100`

= ₹ 60,000.