Accountancy

SOLUTION (i) When a partner retires or dies.(ii) When there is a change in the profit-sharing ratio.

SOLUTION Gaining Share = New Profit Share- Old Profit Share.

SOLUTION The objective of calculating Gaining Ratio is to find out the compensation to be paid by each of the remaining partners to the retiring partner.

SOLUTION Gaining ratio is the ratio in which the remaining, i.e., continuing partners take the retiring partner's share of profit.

SOLUTION Retirement of a partner means that the partner censes to be a partner of the firm. It results in reconstitution of the firm by which old partnership comes to…

SOLUTION General Reserve represents accumulated profits relating to the period prior to the admission of a new partner. It belongs to old partners and, therefore, is distributed among old partners.

SOLUTION No, the accountant was not correct in doing so.Reason: Since the new partner has brought his share of goodwill in cash against self-generated goodwill, it cannot be recognised in…

SOLUTION Prateek's share = 1 / 3; Prateek's Capital = Rs. 1,00,000.(a) Based on Prateek's Capital, Total Capital of the firm will be = Rs. 1,00,000 x 3 / 1…

SOLUTION Premium for Goodwill is not recorded in the books of account when the incoming partner pays it privately to the sacrificing partners.