When the new partner brings cash for goodwill, the amount is credited to
Ans – c) Explanation:- Journal Entry is Cash A/c Dr. To Premium for goodwill A/c
Commerce School
Student Community
Archives Answers
Answer
P and Q are partners in a firm having capitals of ₹ 15,000 each. R is admitted for 1/3rd share for which he has to bring ₹ 20,000 for his share of capital. The amount of goodwill will be
Ans – b) Solution:- Net Worth of the firm (Including Goodwill) = 20,000 × 3 = ₹ 60,000 Net Worth of the firm (Exluding Goodwill) = 15,000 + 15,000 + 20,000 = ₹ 50,000 Goodwill of the firm = 60,000…
A and B are partners in a firm having a capital of ₹ 54,000 and ₹ 36,000 respectively. They admitted C for 1/3rd share in the profits. C brough proportionate amount of capital. The capital brought in by C would be
Ans – b) Solution:- Total adjusted capital of A and B = ₹ 54,000 + ₹ 36,000 = ₹ 90,000 Combined profit share of A and B = 1 – 1/3 = 2/3 Total capital of the firm = ₹…
For which of the following situations, old profit sharing ratio of partners is used at the time of admission of a new partner?
Ans – c) The existing goodwill is written off in the old ratio of partners.
Increase in the value of liabilities at the time of admission of a partner is
Ans – a) Explanation:- Increase in the value of liabilities is the loss Thus, it is debited to Revaluation Account.
Manav and Nath were partners sharing profits and losses in the ratio of 5 : 3. Narayan was admitted as a partner for 1/6th share in the profits. Narayan was unable to bring his share of goodwill premium in cash. The Journal entry recorded for goodwill premium is given below:
Ans – b) Explanation:- sacrificing ratio of Manav and Nath is 15,000 : 35,000 3 : 7
Anita and Babita were partners sharing profits and losses in the ratio of 3 : 1. Savita was admitted for 1/4th share in the profits. Savita was unable to bring her share of goodwill premium in cash. The Journal entry recorded for goodwill premium is given below:
Ans – a) Solution:- the sacrificing ratio of Anita and babita as per question 8,000 : 16,000 1 : 2 Thus Savita gets his share 1/5th from Anita and babita in 1 : 2 Savita gets from Anita 1/5 ×…
Mita and Sumit are partners in a firm with capitals of ₹ 6,00,000 and ₹ 4,00,000 respectively. Keshav was admitted as a new partner for 1/5th share in the profits of the firm. Keshav brought ₹ 40,000 as his share of goodwill premium and ₹ 3,00,000 of his capital. The amount of goodwill premium credited to Sumit will be
Ans – a) Solution:- The Premium for Goodwill brought in by a new partner is credited to sacrificing partners in their sacrificing ratio. in the absence of any further information, the old ratio is always equal to the sacrificing ratio…
Mona and Tina were partners in a firm sharing profits in the ratio of 3 : 2. Naina was admitted with 1/6th share in the profits of the firm. At the time of admission, Workmen’s Compensation Reserve appeared in the Balance Sheet of the firm at ₹ 32,000. The claim on account of workmen’s compensation was determined at ₹ 40,000. Excess of claim over the reserve will be
Ans – b) Explanation:- If Worken Compensation Claim is more than the available Workmen Compensation Reserve. The excess will be debited to Revaluation Account.
When a new partner is admitted, the balance of ‘General Reserve’ appearing in the Balance sheet at the time of admission is credited to
Ans – c) Explanation:- The General Reserve is part of the past profits earned by the old partners. Thus it belongs to old partners in the old profit-sharing ratio.