Question # 03 Andrew and Jones are partners of Rs. 120,000 and Rs. 80,000 respectively. They share profit and loss in the ratio of 3:2. They agreed to admit Giles as a partner. Required: Give the...

Question # 03

Andrew and Jones are partners of Rs. 120,000 and Rs. 80,000 respectively. They share profit and loss in the ratio of 3:2. They agreed to admit Giles as a partner.


Required:

Give the necessary journal entries and prepare balance sheet in each of the following cases:

a) Giles invests Rs. 100,000 cash and receiving a 1/3rd interest.

b) Giles invests Rs. 80,000 cash and receiving a 1/4th interest, his capital is to be credited of the entire amount of his investment.

c) Giles invests Rs. 40,000 cash for 1/5th interest. Old partners are not ready to reduce their capital balances.