Vinay and Naman are partners sharing profits in the ratio of 4: 1. Their capitals were Rs. 80,000 and Rs. 60,000 respectively. Reserve appeared in the books at Rs. 20,000. 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. (C.B.S.E Comptt. 2018)
SOLUTION Value of the goodwill of the firm Rs. 40,000
List any two items that need adjustments in books of accounts of a firm at the time of admission of a partner: – (i)Adjustment for Goodwill: (ii) Adjustment of Accumulated Profits, Reserves and Losses. A, B, C and D were partners in a firm sharing profits in the ratio of 4: 3: 2: 1. E brought Rs. 10,000 for his share of goodwill premium in cash which was correctly recorded in the books by the accountant. The accountant showed goodwill at Rs. 1,00,000 in the books. Was the accountant correct in doing so? Give reason in support of your answer.
SOLUTION No, the accountant was not correct non-purchased goodwill cannot be shown in the books.
A, B and C are the partners sharing profits and losses in the ratio of 5: 3: 2. C retired and his capital balance after adjustments regarding Reserves, Accumulated profits / losses and gain / loss on revaluation was Rs. 2,50,000. C share was paid Rs. 3,00,000 in full of settlement. Afterwards D was admitted D. for 1 / 5th. (C.B.S.E. Sample Paper, 2017)
SOLUTION C’s share of Goodwill = 3,00,000 - 2,50,000 = Rs. 50,000Firm’s Goodwill = 50,000 x 10 / 2 = Rs. 2,50,000
Geeta, Sunita and Anita were partners in a firm sharing profits in the ratio of the 5: 3: 2. On 1-1-2015 they admitted Yogita as a new partner Account for 1 / 10th share in the profit was showing a debit balance of Rs. 20,000 which was credited by the accountant of the firm to the capital accounts of Geeta, Sunita and Anita in their profit-sharing ratio. Did the accountant give correct treatment? Give reason in support of your answer.
SOLUTION No, the accountant was not correct non-purchased goodwill cannot be shown in the books.
Karan, Nakul and Asha were partners in a firm sharing profits and losses in the ratio 3: 2: 1. At the time of admission of a partner, the goodwill of the firm was valued at Rs. 2,00,000. The accountant of the firm passed the entry in the books of accounts and thereafter showed goodwill Rs. 2,00,000 as an asset in the Balance Sheet Is he correct in doing so? Why? (C.B.S.E Sample Paper, 2015)
SOLUTION Accountant is not correct As per AS - 26, only purchased goodwill can be shown non purchased in the books. In this case, goodwill cannot be recorded because it…
Amit and Beena were partners in a firm sharing profits and losses in the ratio of 3: 1. Chaman was admitted as a new partner for l / 6th share in the profits. Chaman acquired 2 / 5th of his share from Amit. How much share did Chaman acquire from Beena?
SOLUTION Chaman acquired 3 / 5th of his share from Beena.Thus he acquired 1 / 6 x 3 / 5 = 1 / 10 share from Beena.
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