Accountancy

X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner for 1/4th share. At the time of admission of Z, Stock (Book Value Rs. 1,00,000) is to be reduced by 40% and Furniture (Book Value Rs. 60,000) is to be reduced to 40%. Pass the necessary Journal entries.

Solution

Continue ReadingX and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner for 1/4th share. At the time of admission of Z, Stock (Book Value Rs. 1,00,000) is to be reduced by 40% and Furniture (Book Value Rs. 60,000) is to be reduced to 40%. Pass the necessary Journal entries.

X and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner and fixed the new profit-sharing ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at Rs. 50,000 and Rs. 5,000 respectively all debtors are good. Pass the necessary Journal entries.

Solution

Continue ReadingX and Y are partners in a firm sharing profits in the ratio of 3 : 2. They admitted Z as a partner and fixed the new profit-sharing ratio as 3 : 2 : 1. At the time of admission of Z, Debtors and Provision for Doubtful Debts appeared at Rs. 50,000 and Rs. 5,000 respectively all debtors are good. Pass the necessary Journal entries.

Pass entries in firm’s Journal for the following on admission of a partner: (i) Unrecorded Investments worth Rs. 20,000 are to be accounted. (ii) Unrecorded liability towards suppliers for Rs. 5,000 is to be accounted. (iii) An item of Rs. 1,600 included in Sundry Creditors is not likely to be claimed and hence should be written back.

Solution

Continue ReadingPass entries in firm’s Journal for the following on admission of a partner: (i) Unrecorded Investments worth Rs. 20,000 are to be accounted. (ii) Unrecorded liability towards suppliers for Rs. 5,000 is to be accounted. (iii) An item of Rs. 1,600 included in Sundry Creditors is not likely to be claimed and hence should be written back.

Pass entries in the firm’s journal for the following on admission of a partner: (i) Machinery be reduced by Rs. 16,000 and Building be appreciated by Rs. 40,000. (ii) A provision be created for Doubtful Debts @ 5% of Debtors amounting to Rs. 80,000. (iii) Provision for warranty claims be increased by Rs. 12,000.

Solution

Continue ReadingPass entries in the firm’s journal for the following on admission of a partner: (i) Machinery be reduced by Rs. 16,000 and Building be appreciated by Rs. 40,000. (ii) A provision be created for Doubtful Debts @ 5% of Debtors amounting to Rs. 80,000. (iii) Provision for warranty claims be increased by Rs. 12,000.

Aman commenced business with a capital of Rs. 2,50,000 on 1st April, 2013. During the five years ended 31st March, 2018, the following profits and losses were made: 31st March, 2014−Loss Rs. 5,000 31st March, 2015−Profit Rs. 13,000 31st March, 2016−Profit Rs. 17,000 31st March, 2017−Profit Rs. 20,000 31st March, 2018−Profit Rs. 25,000 During this period he had drawn Rs. 40,000 for his personal use. On 1st April, 2018, he admitted Boman into partnership on the following terms: Boman to bring for his half share in the business, capital equal to A’s Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount Boman should invest to become a partner and pass entries to record the transactions relating to admission.

Solution

Continue ReadingAman commenced business with a capital of Rs. 2,50,000 on 1st April, 2013. During the five years ended 31st March, 2018, the following profits and losses were made: 31st March, 2014−Loss Rs. 5,000 31st March, 2015−Profit Rs. 13,000 31st March, 2016−Profit Rs. 17,000 31st March, 2017−Profit Rs. 20,000 31st March, 2018−Profit Rs. 25,000 During this period he had drawn Rs. 40,000 for his personal use. On 1st April, 2018, he admitted Boman into partnership on the following terms: Boman to bring for his half share in the business, capital equal to A’s Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount Boman should invest to become a partner and pass entries to record the transactions relating to admission.

E and F were partners in a firm sharing profits in the ratio of 3 : 1. They admitted G as a new partner on 1st April, 2019 for 1/3rd share. It was decided that E, F and G will share future profits equally. G brought Rs. 50,000 in cash and machinery valued at Rs. 70,000 as premium for goodwill. Pass necessary Journal entries in the books of the firm.

Solution

Continue ReadingE and F were partners in a firm sharing profits in the ratio of 3 : 1. They admitted G as a new partner on 1st April, 2019 for 1/3rd share. It was decided that E, F and G will share future profits equally. G brought Rs. 50,000 in cash and machinery valued at Rs. 70,000 as premium for goodwill. Pass necessary Journal entries in the books of the firm.

Disha and Divya are partners in a firm sharing profits in the ratio of 3 : 2 respectively. The fixed capital of Disha is Rs. 4,80,000 and of Divya is Rs. 3,00,000. On 1st April, 2019 they admitted Hina as a new partner for 1/5th share in future profits. Hina brought Rs. 3,00,000 as her capital. Calculate value of goodwill of the firm and record necessary Journal entries on Hina’s admission.

Solution

Continue ReadingDisha and Divya are partners in a firm sharing profits in the ratio of 3 : 2 respectively. The fixed capital of Disha is Rs. 4,80,000 and of Divya is Rs. 3,00,000. On 1st April, 2019 they admitted Hina as a new partner for 1/5th share in future profits. Hina brought Rs. 3,00,000 as her capital. Calculate value of goodwill of the firm and record necessary Journal entries on Hina’s admission.

Verma and Sharma are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admitted Ghosh as a new partner for 1/5th share of profits. Ghosh is to bring in Rs. 20,000 as capital and Rs. 4,000 as his share of goodwill premium. Give the necessary Journal entries: (a) When the amount of goodwill is retained in the business. (b) When the amount of goodwill is fully withdrawn. (c) When 50% of the amount of goodwill is withdrawn. (d) When goodwill is paid privately

Solution

Continue ReadingVerma and Sharma are partners in a firm sharing profits and losses in the ratio of 5 : 3. They admitted Ghosh as a new partner for 1/5th share of profits. Ghosh is to bring in Rs. 20,000 as capital and Rs. 4,000 as his share of goodwill premium. Give the necessary Journal entries: (a) When the amount of goodwill is retained in the business. (b) When the amount of goodwill is fully withdrawn. (c) When 50% of the amount of goodwill is withdrawn. (d) When goodwill is paid privately

Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th share in the profits of the firm. Ajay brings Rs. 5,00,000 as his share of capital. The value of the total assets of the firm was Rs. 15,00,000 and outside liabilities were valued at Rs. 5,00,000 on that date. Give necessary Journal entry to record goodwill at the time of Ajay’s admission. Also show your workings

Solution

Continue ReadingAsin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th share in the profits of the firm. Ajay brings Rs. 5,00,000 as his share of capital. The value of the total assets of the firm was Rs. 15,00,000 and outside liabilities were valued at Rs. 5,00,000 on that date. Give necessary Journal entry to record goodwill at the time of Ajay’s admission. Also show your workings