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.
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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.
Niyati and Aisha were partners in a firm sharing profits and losses in the ratio of 4 : 3. They admitted Bina as a new partner. Niyati sacrificed 1/4th from her share and Aisha sacrificed 1/7th from her share in favor of Bina. Bina’s share in the profits of the firm will be
Ans – b) solution:- Bina gets 1/4 from Niyati Bina gets 1/7 from Aisha Thus Bina’s share in profit 1/4 + 1/7 = 11/28
A and B are partners sharing profits in the ratio of 2 : 3, they admit C as a partner for 1/4th share, the sacrificing ratio of A and B will be
Ans – a) Explanation:- In the absence of any further information. the sacrificing ratio of the old partners is always equal to the old ratio.
When goodwill existing in the books is written off at the time of admission of a partner, it is transferred to partner’ Capital accounts in their
Ans – a) Explanation:- Existing Goodwill was purchased by old partners in the past. the it should be written of from the books in their old profit sharing ratio.
Goodwill brought by the incoming partner is distributed among the old partners in their
Ans – c) Explanation:- Goodwill brought in by the incoming partner’s is distributed to old partners in their sacrificing ratio of compensate them.