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# Why Accounting Education Volunteer

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" When a new partner in partnership firm , he and other partner can agree for the capital adjustment on the basis of new profit sharing ratio and new partner’s capital as base . In such condition , we first calculate total capital on the basis of new partner’s capital. "

Suppose Vinod is new partner in the firm of vijay and rajesh with 3:2 and their capital are Rs. 10000 and Rs. 30000 but Vinod will ¼ share . He brings Rs. 10000 as capital . If all the partner agree to adjust their capital according to new profit sharing ratio , then calculate who invest more capital in cash form or who withdraw his excess capital

Total capital = 10000 X 4/1 =40000

Vijay’s new capital = 40000 X 9/20 = 18000

Rajesh’s new capital = 40000 X 4/20 = 8000

Vijay brings his external capital in cash because now he needs = 18000-10000 = 8000
But Rajesh withdraw his
excess capital = 30000-8000 = 22000

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Accounting Education: Adjustment of capital at the time of admission of new partner
Accounting Education
http://www.svtuition.org/
http://www.svtuition.org/