I have one question related to partnership. Therefore, could you please help me to solve this ? I am very thankful for you help.
P and Q are in partnerships sharing profit equally.
On 30 June 20×5, R joined the partnership and it was agreed that from that date all three partners should share equally in the profit.
In the year ended 31 December 20X5, the profit amounted to $300,000, accruing evenly over the year after charging an irrecoverable debt of $30,000 which it was agreed should be borne equally by P and Q only.
What should P’s total profit share be for the year ended 31 December 20X5 ?
The first 6 months’ porfit 150000-30000=120000/2 =60000
and secind 6 months = 180000/3 = 60000
So the p’s total profit is 120000
The second 6 months profit is
So p’s total profit = 110000
The profit for the year, before the debt write-off = 330,000 or 165,000 per 6 months.
1st 6 months, bears all the debt write-off, so profits = 165,000 – 30,000 = 135,000, of which P and Q each get 50%, or $67,500
2nd 6 months, 165,000 shared equally between P, Q and R so 55,000 each.
P’s total share = 67,500 + 55,000 = 122,500
[Check: P 122,500, Q, 122,500 R 55,000. Total = 300,000, total profits]
Thank you very much lecture !
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