On 1.1.2014, A and B started a firm, sharing profits and losses equally. Each of the partners contributed ₹2,000 towards the capital of the firm and was allowed to draw ₹400 p.m. in anticipation of profits. On 1.1.2015, they admitted C as a third partner with equal share and he contributed ~ 3,000 towards his capital and a further sum of  ₹2,000 towards premium for goodwill. He too was entitled to draw ~ 400 p.m. From 1.1.2016, A got a part-time job elsewhere and considered that he would be unable to devote his full time towards the business of the firm, agreed to leave half of his share in the profits to be apportioned equally between B and C and his drawings was reduced to ₹200 p.m. from 1.1.2016.

On 1.1.2017, B got a full time job and in consequence, A had to leave his part time job and to devote full time in the firm. It was arranged that B will retain only a quarter of his earlier share in the firm and would be drawing nothing from 1.1.2017. A and C would be drawing @ ~ 600 p.m. instead. The interest surrendered by B would be apportioned equally by A and C.

On 31.12.2017, B decided to retire altogether from the firm. You are required to ascertain the amount due to B by the firm from the following particulars :

(a) Profits earned by firm from the following particulars.

(b) B’s share of goodwill is to be taken at 2 years’ purchase of the average of his share of profits of the previous two years.

(c) The partners have drawn exactly what they could draw under the agreement.

Transcribed Image Text:

201417,000; 2015 - 18,000; 2016-24,000; 2017 -- 28,896.