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KA Quiz naviga 10 On May 31, Ahmed retires from the partnership of Ali, Ahmed, and Khalid
KA Quiz naviga 10 On May 31, Ahmed retires from the partnership of Ali, Ahmed, and Khalid. The partner capital balances are Ali, OMR 80,000: Ahmed, OMR 60,000; and Khalid, OMR 40,000. The profit and loss ratio has been 3:2:1 for Ali, Ahmed, and Khalid, respectively, Assume that, Ahmed receives OMR 56,000 What will be the effect on Ali's capital? Finish attempt Time left 0:25:5 Select one: a. Increase by 3,000 d. Decrease by 3,000 c. Decrease by 4,000 di Increase by 4.000 ege Next page
Expert Solution
SOLUTION:
Profit and loss ratio:
Ali : Ahmed : Khalid = 3 : 2 : 1
Capital Balance:
Ali = OMR 80000
Ahmed = OMR 60000
Khalid = OMR 40000
Ahmed Retires from the partnership, and
Ahmed Received OMR 56000 and his capital balance is OMR 60000.
Balance Capital of Ahmed i.e.4000 (60000 - 56000) will be distributed to the remaining partner Ali and Khalid in the ratio of 3:1
Ali's Capital will increase by = 4000* 3/4
= OMR 3000
Khalid's Capital will increase by = 4000 * 1/4 = OMR 1000
Hence Ali's Capital will increase by OMR 3000
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