Om, Ram, and Shanti were partners sharing profits in the ratio of 1/2, 2/5, and 1/10. Find the new profit-sharing ratio of the remaining partners if Shanti dies.
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Madan and Mohan are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 31st March, 2023, they admitted Chintu for 1/5th share in the profits of the firm, who contributes ₹ 2,50,000 as capital for 1/5th share.
Total capital of new firm = ₹ 2,50,000 × 5/1 = ₹ 12,50,000 Madan’s new capital = ₹ 12,50,000 × 12/25 = ₹ 6,00,000 Mohan’s new capital = ₹ 12,50,000 × 8/25 = ₹ 4,00,000 Particulars Madan (₹) Mohan (₹)…
Leena and Rohit are in partnership sharing profits in the ratio of 3 : 2. They admit Manoj for 1/5th share in profits. Capitals of Leena and Rohit after adjustments are ₹ 60,000 and ₹ 40,000 respectively. Manoj’ is to bring 20% of total capital of the new firm. Calculate Manoj’s Capital.
Total Capital of Leena and Rohit for 4/5 share = ₹ 60,000 + ₹ 40,000 = ₹ 10,0000. Capital of new firm should be = ₹ 1,00,000 × 5/4 = ₹ 1,25,000 Thus, Manoj’s proportional capital = ₹ 1,25,000 ×…
Abha and Binay are in partnership with respective capitals of ₹ 3,00,000 and ₹ 2,00,000. The admitted Chitra as a partner for 1/6th share in profits
Capital of Abha and Binay for 5/6 share = ₹ 3,00,000 + ₹ 2,00,000 = ₹ 5,00,000 Capital of the new firm should be = ₹ 5,00,000 × 6/5 = ₹ 6,00,000 Chitra’s Capital = ₹ 6,00,000 × 1/6 =…
If new partner has to bring proportionate capital which is not given, how is it determined?
Step 1: Calculate ‘Total Capital’ of New Firm as: Total Adjusted Capital of Old Partners × Reciprocal of Total New Profit Share of Old Partners. Step 2: Calculate Capital of the New Partner as: Total Capital (Step 1) × Profit…
State two effects of Accounting Standard – 26 (Intangible Assets) as issued by the Institute of Chartered Accountants of India on goodwill.
As per AS – 26 (Regarding Goodwill): (i) Firm can recognise Goodwill in the books of account when it is purchased, i.e., consideration in money or money’s worth has been paid for it. (ii) In case of admission/retirement/death of a…
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How is goodwill paid privately by an incoming partner treated in books of account?
When goodwill is paid privately by an incoming partner, no entry is passed in the books of the firm as it is not a transaction of the firm.
What is Hidden Goodwill and how is it calculated?
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Explain the treatment of goodwill in the books of a firm on admission of a partner when godwill appears in the Balance Sheet.
Existing goodwill, (i.e., goodwill appearing in the Balance Sheet) is written off to the Old Partner’s Capital Accounts in their old profit-sharing ratio. Old Partner’s Capital A/cs Dr. To Goodwill A/c (Being the existing goodwill written off in the old…