Accountancy

X and Y are partners with capitals of Rs. 50,000 each. They admit Z as a partner for 1/4th share in the profits of the firm. Z brings in Rs. 80,000 as his share of capital. The Profit and Loss Account showed a credit balance of Rs. 40,000 as on date of admission of Z. Give necessary journal entries to record the goodwill.

Solution Total Capital of the firm after Z’s admission = X’s Capital + Y’s Capital + undistributed Profit +Z’s Capital= 50,000 + 50,000 + 40,000 + 80,000 = Rs. 2,20,000 Capitalised value…

Continue ReadingX and Y are partners with capitals of Rs. 50,000 each. They admit Z as a partner for 1/4th share in the profits of the firm. Z brings in Rs. 80,000 as his share of capital. The Profit and Loss Account showed a credit balance of Rs. 40,000 as on date of admission of Z. Give necessary journal entries to record the goodwill.

Vinay and Naman are partners sharing profits in the ratio of 4 : 1. Their capitals were Rs. 90,000 and Rs. 70,000 respectively. They admitted Prateek for 1/3 share in the profits. Prateek brought Rs. 1,00,000 as his capital. Calculate the value of firm’s goodwill.

Solution Prateek’s capital = 1,00,000Capitalised value of the firm = (prateek’s capital × reciprocal of Prateek’s share of profit) = 1,00,000×3 = 3,00,000Net worth of the firm = total capital of the partner…

Continue ReadingVinay and Naman are partners sharing profits in the ratio of 4 : 1. Their capitals were Rs. 90,000 and Rs. 70,000 respectively. They admitted Prateek for 1/3 share in the profits. Prateek brought Rs. 1,00,000 as his capital. Calculate the value of firm’s goodwill.

Bhuwan and Shivam were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were Rs. 50,000 and Rs. 75,000 respectively. They admitted Atul on 1st April, 2018 as a new partner for 1/4th share in future profits. Atul brought Rs. 75,000 as his capital. Calculate the value of goodwill of the firm and record necessary Journal entries for the above transactions on Atul’s admission.

Solution

Continue ReadingBhuwan and Shivam were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were Rs. 50,000 and Rs. 75,000 respectively. They admitted Atul on 1st April, 2018 as a new partner for 1/4th share in future profits. Atul brought Rs. 75,000 as his capital. Calculate the value of goodwill of the firm and record necessary Journal entries for the above transactions on Atul’s admission.

A and B are partners in a firm with capital of Rs. 60,000 and Rs. 1,20,000 respectively. They decide to admit C into the partnership for 1/4th share in the future profits. C is to bring in a sum of Rs. 70,000 as his capital. Calculate amount of goodwill.

Solution

Continue ReadingA and B are partners in a firm with capital of Rs. 60,000 and Rs. 1,20,000 respectively. They decide to admit C into the partnership for 1/4th share in the future profits. C is to bring in a sum of Rs. 70,000 as his capital. Calculate amount of goodwill.

Anil and Sunil are partners in a firm with fixed capitals of Rs. 3,20,000 and Rs. 2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April, 2012. Charu brought Rs. 3,20,000 as her share of capital. Calculate value of goodwill and record necessary Journal entries.

Solution

Continue ReadingAnil and Sunil are partners in a firm with fixed capitals of Rs. 3,20,000 and Rs. 2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April, 2012. Charu brought Rs. 3,20,000 as her share of capital. Calculate value of goodwill and record necessary Journal entries.

Madan and Gopal are partners sharing profits in the ratio of 3 : 2. They admit Sooraj for 1/3rd share in profits on 1st April, 2019. They also decide to share future profits equally. Goodwill of the firm was valued at Rs. 5,50,000. Goodwill existed in the books of account at Rs. 1,00,000,  which the partners decide to carry forward. Sooraj is unable to bring his share of goodwill. Pass the necessary Journal entries on admission of Sooraj, if: (a) Goodwill is not to be raised and written off; and (b) Goodwill is to be raised and written off.

Solution

Continue ReadingMadan and Gopal are partners sharing profits in the ratio of 3 : 2. They admit Sooraj for 1/3rd share in profits on 1st April, 2019. They also decide to share future profits equally. Goodwill of the firm was valued at Rs. 5,50,000. Goodwill existed in the books of account at Rs. 1,00,000,  which the partners decide to carry forward. Sooraj is unable to bring his share of goodwill. Pass the necessary Journal entries on admission of Sooraj, if: (a) Goodwill is not to be raised and written off; and (b) Goodwill is to be raised and written off.

Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted Ram for 1/4th share on 1st April, 2019. It was agreed that goodwill of the firm will be valued at 3 years’ purchase of the average profit of last 4 years ended 31st March, were Rs. 50,000 for 2015-16, Rs. 60,000 for 2016-17, Rs. 90,000 for 2017-18 and Rs. 70,000 for 2018-19. Ram did not bring his share of goodwill premium in cash. Record the necessary Journal entries in the books of the firm on Ram’s admission when: (a) Goodwill appears in the books at Rs. 2,02,500. (b) Goodwill appears in the books at Rs. 2,500. (c) Goodwill appears in the books at Rs. 2,05,000. 

Solution

Continue ReadingMohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted Ram for 1/4th share on 1st April, 2019. It was agreed that goodwill of the firm will be valued at 3 years’ purchase of the average profit of last 4 years ended 31st March, were Rs. 50,000 for 2015-16, Rs. 60,000 for 2016-17, Rs. 90,000 for 2017-18 and Rs. 70,000 for 2018-19. Ram did not bring his share of goodwill premium in cash. Record the necessary Journal entries in the books of the firm on Ram’s admission when: (a) Goodwill appears in the books at Rs. 2,02,500. (b) Goodwill appears in the books at Rs. 2,500. (c) Goodwill appears in the books at Rs. 2,05,000. 

A, B and C are in partnership sharing profits and losses in the ratio of 5 : 4 : 1 respectively. Two new partners D and E are admitted. The profits are now to be shared in the ratio of 3 : 4 : 2 : 2 : 1 respectively. D is to pay Rs. 90,000 for his share of Goodwill but E has insufficient cash to pay for Goodwill. Both the new partners introduced Rs. 1,20,000 each as their capital. You are required to pass necessary Journal entries.

Solution

Continue ReadingA, B and C are in partnership sharing profits and losses in the ratio of 5 : 4 : 1 respectively. Two new partners D and E are admitted. The profits are now to be shared in the ratio of 3 : 4 : 2 : 2 : 1 respectively. D is to pay Rs. 90,000 for his share of Goodwill but E has insufficient cash to pay for Goodwill. Both the new partners introduced Rs. 1,20,000 each as their capital. You are required to pass necessary Journal entries.

On the admission of Rao, goodwill of Murty and Shah is valued at Rs. 30,000. Rao is to get 1/4th share of profits. Previously Murty and Shah shared profits in the ratio of 3 : 2. Rao is unable to bring amount of goodwill. Give Journal entries in the books of Murty and Shah when: (a) there is no Goodwill Account and (b) Goodwill appears in the books at Rs. 10,000.

Solution

Continue ReadingOn the admission of Rao, goodwill of Murty and Shah is valued at Rs. 30,000. Rao is to get 1/4th share of profits. Previously Murty and Shah shared profits in the ratio of 3 : 2. Rao is unable to bring amount of goodwill. Give Journal entries in the books of Murty and Shah when: (a) there is no Goodwill Account and (b) Goodwill appears in the books at Rs. 10,000.