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Ans – a) Explanation:- Retiring Partner’s Loan A/c = Partner’s opening capital A/c – Investments took over – took over 20% of the debtors 1,23,000 = 2,01,000 – 58,000 – 20/100 of Debtors 20% of Debtors = 2,01,000 – 1,23,000…
Ans – d) Solution:- Amay’s share in General Reserve = 7,500 × 1/3 = ₹ 2,500 Amay’s share in Goodwill = 30,000 × 1/3 = ₹ 10,000 Amay’s share in gain on revaluation = 24,000 × 1/3 = ₹ 8,000…
Ans – b) Explanation:- An increase in assets is recorded on the credit side of the Revaluation Account.
Ans – b) Explanation:- The increase and decrease in the value of assets and liabilities belong to the old partners in their old profit-sharing ratio. Thus loss on revaluation is debited to all the partners in their old profit sharing…
Ans – b) Explanation:- If no further information is given, the increase and decrease in the value of all assets and liabilities belong to the old partners in their old profit-sharing ratio. Thus gain on revaluation is credited to all…
Ans – a) Explanation:- Increases in assets are recorded at the credit side at the time of reconstitution of the partnership firm.
Ans – b) Explanation:- The retiring partner sacrifices his share to the remaining partners. The remaining partners gain his share in the gaining ratio. As goodwill is part of future expected profits. The retiring partners’ share in the goodwill is…
Ans – c) Explanation:- The old goodwill is the purchased goodwill. It is purchased in the past by all the partners including retiring partners. Thus Existing Goodwill is written off in the old profit-sharing ratio among all the partners including…
Ans – d) Explanation:- As goodwill is part of the expected future profits that would be earned on the basis of the partner’s efforts till date. Thus retiring partners’ share in the goodwill is credited to him. This share is…
Ans – d) Explanation:- If no information is given all accumulated profits and reserve are distributed in old partners in their old profit sharing ratio. Thus no workmen compensation reserve will be shown in new Balance Sheet.