nnn

Illustration 42. 057 On 1.1.2010, A and B started a firm of Cost Accountants sharing profits and losses equally. Each of the partners contributed 2,000 towards his capital of the firm and was allowed to draw 400 p.m. in anticipation of profits. On 1.1.2011, they admitted C as a third partners 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 1.1.2012. A got a part-time job of cost consultant elsewhere and considering 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 Cand his drawings was reduced to ? 200 p.m. for 1st January, 2012. On 1.1.2013, 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 remain only a quarter of his earlier share in the firm and would be drawing nothing from 1.1.2013. A and C would be drawing @ ? 600p.m. instead. The interest surrendered by B would be apportioned equally by A and C. On 31st Dec. 2013, 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 the firm : 2010 - 17.000; 2011 - 18.000 201224.000 2013 28,896 (b) B's share of goodwill is to be taken at two years' purchase of the average of his share of profit of the previous two years. (c) The partners have drawn exactly what they could draw under the agreement