Clinton and Syrah are partners in Tiles Galore. These partners share profits in the ratio $2$:$3.$ They decided to admit Matthew to the partnership on the $30$th

of June $2024.$

Statement of Financial Position of Tiles Galore on the $30$th of June $2024$ before the admission of Matthew:

Additional information:

Mathew will contribute R $80,000$ cash and Furniture valued at R$20000$ to the partnership.

Matthew will obtain $1/5$ of their profit share contributed by Clinton and Syrah based on their existing profit sharing ratios.

Machinery must be revalued to R$250000$ for the purposes of Matthew's admission to the partnership.

Machinery must be revalued to R$200000$ in the new partnership.

Source: Jemedze, S$.2024$

Required

a$.$ Calculate the new profit$-$sharing ratio of Clinton, Syrah and Matthew.

b$.$ Complete the capital accounts of each of the partners in the General Ledger of Tiles Galore on the $30$th of June $2024.$ Make use of the columnar format.

Answer

a$.$ The new profit$-$sharing ratio $($Clinton : Syrah : Matthew$)$ is

b$.$

Clinton and Syrah are partners in Tiles Galore. These partners share profits in the ratio $2$:$3.$ They decided to admit Matthew to the partnership on the $30$th

of June $2024.$

Statement of Financial Position of Tiles Galore on the $30$th of June $2024$ before the admission of Matthew:

Additional information:

Mathew will contribute R $80,000$ cash and Furniture valued at R$20000$ to the partnership.

Matthew will obtain $1/5$ of their profit share contributed by Clinton and Syrah based on their existing profit sharing ratios.

Machinery must be revalued to R$250000$ for the purposes of Matthew's admission to the partnership.

Machinery must be revalued to R$200000$ in the new partnership.

Source: Jemedze, S$.2024$

Required

a$.$ Calculate the new profit$-$sharing ratio of Clinton, Syrah and Matthew.

b$.$ Complete the capital accounts of each of the partners in the General Ledger of Tiles Galore on the $30$th of June $2024.$ Make use of the columnar format.

Answer

a$.$ The new profit$-$sharing ratio $($Clinton : Syrah : Matthew$)$ is

b$.$