Accountancy

A and B are partners sharing profits and losses in the ratio of 7 : 5. They admit C, their Manager, into partnership who is to get 1/6th share in the business. C brings in Rs. 10,000 for his capital and Rs. 3,600 for the 1/6th share of goodwill which he acquires 1/24th from A and 1/8th from B. Profits for the first year of the new partnership was Rs. 24,000. Pass necessary Journal entries for C’s admission and apportion the profit between the partners.

Solution

Continue ReadingA and B are partners sharing profits and losses in the ratio of 7 : 5. They admit C, their Manager, into partnership who is to get 1/6th share in the business. C brings in Rs. 10,000 for his capital and Rs. 3,600 for the 1/6th share of goodwill which he acquires 1/24th from A and 1/8th from B. Profits for the first year of the new partnership was Rs. 24,000. Pass necessary Journal entries for C’s admission and apportion the profit between the partners.

A and B are in partnership sharing profits and losses in the ratio of 5 : 3. C is admitted as a partner who pays Rs. 40,000 as capital and the necessary amount of goodwill which is valued at Rs. 60,000 for the firm. His share of profits will be 1/5th which he takes 1/10th from A and 1/10th from B. Give Journal entries and also calculate future profit-sharing ratio of the partners.

Solution

Continue ReadingA and B are in partnership sharing profits and losses in the ratio of 5 : 3. C is admitted as a partner who pays Rs. 40,000 as capital and the necessary amount of goodwill which is valued at Rs. 60,000 for the firm. His share of profits will be 1/5th which he takes 1/10th from A and 1/10th from B. Give Journal entries and also calculate future profit-sharing ratio of the partners.

M and J are partners in a firm sharing profits in the ratio of 3 : 2. They admit R as a new partner. The new profit-sharing ratio between M, J and R will be 5 : 3 : 2. R brought in Rs. 25,000 for his share of premium for goodwill. Pass necessary Journal entries for the treatment of goodwill.

Solution

Continue ReadingM and J are partners in a firm sharing profits in the ratio of 3 : 2. They admit R as a new partner. The new profit-sharing ratio between M, J and R will be 5 : 3 : 2. R brought in Rs. 25,000 for his share of premium for goodwill. Pass necessary Journal entries for the treatment of goodwill.

B and C are in partnership sharing profits and losses as 3 : 1. They admit D into the firm, D pays premium of Rs. 15,000 for 1/3rd share of the profits. As between themselves, B and C agree to share future profits and losses equally. Draft Journal entries showing appropriations of the premium money.

Solution

Continue ReadingB and C are in partnership sharing profits and losses as 3 : 1. They admit D into the firm, D pays premium of Rs. 15,000 for 1/3rd share of the profits. As between themselves, B and C agree to share future profits and losses equally. Draft Journal entries showing appropriations of the premium money.

Give Journal entries to record the following arrangements in the books of the firm: (a) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium (goodwill) of Rs. 2,000 for 1/4th share of the profits, shares shares of B and C remain as before. (b) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium of Rs. 2,100 for 1/4th share of profits which he acquires 1/6th from B and 1/12th from C.

Solution

Continue ReadingGive Journal entries to record the following arrangements in the books of the firm: (a) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium (goodwill) of Rs. 2,000 for 1/4th share of the profits, shares shares of B and C remain as before. (b) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium of Rs. 2,100 for 1/4th share of profits which he acquires 1/6th from B and 1/12th from C.

A and B are partners sharing profits and losses in the ratio of 2 : 5. They admit C on the condition that he will bring Rs. 14,000 as his share of goodwill to be distributed between A and B. C’s share in the future profits or losses will be 1/4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by C will be received by A and B? 

Solution  ABOLD RATIO25  C is admitted for 1/4shareLet the combined share of A, B and C be = 1Combined share of A and B after C’s admission = 1 − C’s…

Continue ReadingA and B are partners sharing profits and losses in the ratio of 2 : 5. They admit C on the condition that he will bring Rs. 14,000 as his share of goodwill to be distributed between A and B. C’s share in the future profits or losses will be 1/4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by C will be received by A and B? 

A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner C is admitted.  A surrender 1/5th of his share and B surrenders 2/5th of his share and B surrenders 2/5th of his share in favour of C. For the purpose of C’s admission, goodwill of the firm is valued at Rs. 75,000 and C brings in his share of goodwill in cash which is retained in the firm’s books. Journalise the above transactions.

Solution

Continue ReadingA and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner C is admitted.  A surrender 1/5th of his share and B surrenders 2/5th of his share and B surrenders 2/5th of his share in favour of C. For the purpose of C’s admission, goodwill of the firm is valued at Rs. 75,000 and C brings in his share of goodwill in cash which is retained in the firm’s books. Journalise the above transactions.

P and Q are partners sharing profits in the ratio of 3 : 2. They admit R into partnership who acquires 1/5th of his share from P and 4/25th share from Q. Calculate New Profit-sharing Ratio and Sacrificing Ratio.

Solution Calculation of New Profit-Sharing RatioP: Q = 3: 2 (Old Ratio)R acquires 1/5th of his share from P And,Remaining 4/5th (1−1/5) of his share from Q.If 4/5th share of R=4/25R's share = 4/25 × 54 = 5/25P's sacrifice = 1/5 × 1/5 = 1/25Q's sacrifice = 4/25 P's new share = 3/5−1/25 = 1/5−1/25 = 14/25Q's new share =…

Continue ReadingP and Q are partners sharing profits in the ratio of 3 : 2. They admit R into partnership who acquires 1/5th of his share from P and 4/25th share from Q. Calculate New Profit-sharing Ratio and Sacrificing Ratio.

A, B and C are partners sharing profits in the ratio of 2 : 2 : 1. D is admitted as a new partner for 1/6th share. C will retain his original share. Calculate the new profit-sharing ratio and sacrificing ratio. 

Solution Calculation of New Profit-Sharing Ratio Old Ratio of A, B and C  is 2 : 2 : 1. D is admitted for 1/6th share while . C will retain his 1/5 original shareRemaining  share= 1-1/6-1/5Remaining  share will be shared by A and…

Continue ReadingA, B and C are partners sharing profits in the ratio of 2 : 2 : 1. D is admitted as a new partner for 1/6th share. C will retain his original share. Calculate the new profit-sharing ratio and sacrificing ratio.