Calculate the new profit sharing ratio

Assignment Help Accounting Basics
Reference no: EM133111115

Question - Da Silva and Ehlers are partners in a Green Hydrogen business named DaEh. They specialise in the consultancies and research services, wherby they advise governments on the African continent. Da Silva and Ehlers share profits and losses in the ratio 3:2 according to their partnership agreement. The following Trial Balance was extracted from the financial records of the partnership 31 December 2017: Fischer is a specialist in the green energy industry. Due to the prospects of business growth Da Silva and Ehlers decided to admit Fischer as from 01 January 2018 as a partner under the following terms and conditions:

Fischer will receive 1/5 of the profits and losses.

Da Silva and Ehlers will contribute in the ratio 2:1 towards Fischer's 1/5 profit share.

Fischer must pay N$ 180 0000 for her 1/5 share in the partnership's assets.

The assets of the partnership were re-valued on 01 January 2018 and the revaluation account revealed a surplus of N$60,000.

The new partnership states inter alia:

The partners will not make use of current accounts anymore; therefore all current accounts must be closed off to their capital accounts.

The accounting records will not show any good will.

Required - Calculate the new profit sharing ratio after the admission of Fischer.

Reference no: EM133111115

Questions Cloud

How does the accountant fit the profile of a fraudster : The accountant was a recent honours graduate from a respected university who, supervisors stated, How does the accountant fit the profile of a fraudster
Float management case : Nathan Daniel is a company that produces and retails designer accessories for young professionals. The company partners Nathan Phillips and Daniel Collins, have
Market return in a strong form efficient market : Please briefly define the strong form efficient stock market, and list one way to earn returns higher than the market return in a strong form efficient market.
Define the terms donor strain and recipient strain : Define the terms donor strain and recipient strain and Identify which of the cultures you used were the donor and recipient strains
Calculate the new profit sharing ratio : Fischer must pay N$ 180 0000 for her 1/5 share in the partnership's assets. Calculate the new profit sharing ratio after the admission of Fischer
Analysis of a potential investment opportunity : A junior analyst at the firm you work for has asked you to help interpret the results from their analysis of a potential investment opportunity the firm is cons
Find expensive line of clothing : The firm you are working for is considering expanding their retail clothing business to London. This firm is considering selling both their expensive line of cl
Expensive line of clothing and for cash inflows : The firm you are working for is considering expanding their retail clothing business to London. This firm is considering selling both their expensive line of cl
Prepare the correct consolidation and elimination entries : Hydra Ltd owns 100% of Red Ltd. Prepare the correct consolidation/elimination entries for the year ending 30 June 2021

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd