SOLUTION Partnership is dissolved and not the firm because it is reconstitution of the firm under which the existing agreement comes to an end and a new one comes into…
SOLUTION Since a new partner gets his share of profits from old partners, he must compensate the old partners for the share sacrificed by them. The amount of compensation given…
SOLUTION Since a new partner gets his share of profits from old partners, he must compensate the old partners for the share sacrificed by them. The amount of compensation given…
SOLUTION When the value of goodwill of the firm is not given but has to be inferred on the basis of net worth of the firm, it is called hidden…
SOLUTION When the incoming partner pays the amount of premium for goodwill in cash to the old partners privately outside the business, no entries are passed for it
SOLUTION To compensate the old partners for their sacrifice.
SOLUTION General Reserve A/c Dr.Profit and Loss A/c Dr. To Old Partner’s Capital A/cs(In old Ratio)
SOLUTION The losses which have not been debited to partner’s capital accounts are called accumulated or undistributed losses such as Debit balance of Profit & Loss Account appearing on the…
SOLUTION The profits which have accumulated over the years and have not been credited to partner’s capital accounts are called accumulated or undistributed profits such as General Reserve, Cr. balance…