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Partnership accounts

Accountancy

Sir in this question Higher relative capital method why the 4,000 balance is not apportioned on profit sharing ratio and overall preference given to partner A ignoring partner B

M V Naresh

CA Final

★ 3K+

28-Jan-21 11:06

270

Answers (1)

Under Higher Relative Capital Method , the partner who had contributed highest capital in terms of their profit- sharing ratio are paid off prior to the other partners. Thus B is paid the 4,000 without sharing with A