Question : A and B share profits and losses equally. They have Rs.20,000 each as capital. They admit C as equal partner and goodwill was valued at Rs.30,000. C is to bring in Rs.30,000 as his capital and necessary cash towards his share of goodwill. Goodwill Account will not remain open in books. If profit on revaluation is Rs.13,000, find the closing balance of the capital accounts -
Option 1: Rs.31,500; Rs.31,500; Rs.30,000
Option 2: Rs.26,500; Rs.26,500; Rs.30,000
Option 3: Rs.31,500; Rs.31,500; Rs.20,000
Option 4: Rs.20,000; Rs.20,000; Rs.30,000
Correct Answer: Rs.31,500; Rs.31,500; Rs.30,000
Solution : Goodwill of firm is 30,000.
Now we will find the share of C in goodwill because he is admitted as new partner in business and he should bring his share of goodwill
His share of goowill will be distributed to sacrificing partners.
C's share in goodwill = 30,000 × 1 / 3
= 10,000
Old profit sharing ratio of A and B was 1 :1 and new profit sharing ratio of A,B,C is 1 : 1 : 1
A's Sacrificing Ratio = 1 / 2 - 1 / 3
= 3 - 2 / 6
= 1 / 6
B's Sacrificing Ratio = 1 / 2 - 1 / 3
Sacrificing Ratio is 1 : 1.
So A's share in goodwill = 1 / 2 × 10,000
= 5,000
B's share in goodwill be 5,000.
Revaluation Profit = 13,000
Revaluation Profit will be shared in old partners in old profit sharing ration.
A share in profit = 13,000 × 1 / 2
= 6,500
B share in profit = 6,500
A Capital = 20,000 + 5,000 + 6,500
= 31,500
B Capital = 20,000 + 5,000 + 6,500
Hence,A's Closing capital is 31,500 and B's Closing capital is 31,500 and C's Closing capital is Rs.30000
Hence the correct answer is option 1.
Question : A and B who share profits in the ratio of 3: 2 had capitals of Rs. 2,00,000 and Rs.1,50,000 respectively. They admit C into partnership from 1st April, 2020 on the following terms for I/3rd share in future profits: (i) That C to bring Rs. 2,00,000 as capital. (ii) That C is unable to bring his share of goodwill, goodwill of the firm is valued at Rs.1,50,000. Choose the correct option.
Option 1: Debiting bank a/c Rs 3,00,000 and crediting C's capital account with Rs 3,00,000
Option 2: Debiting Bank account with Rs 2,00,000 and crediting C's capital with Rs 2,00,000
Option 3: Debiting C's current account Rs 50,000 and Crediting A capital account with Rs 30,000 and Rs 20,000
Option 4: Both 2 and 3
Question : Madan and Rakhi were partners sharing profits and losses in the ratio of 2 : 1. On 1st April, 2021 they admitted Amit as a new partner and new ratio was decided as 3:2:1. Goodwill of the firm was valued as Rs.1,20,000. Amit couldn't bring any amount for goodwill. Amount of goodwill share to be credited to Madan and Rakhi Account's will be:-
Option 1: Rs. 30,000 and Rs. 20,000 respectively
Option 2: Rs. 40,000 and Rs. 80,000 respectively
Option 3: Credited to Madan's Capital A/c Rs 20,000
Option 4: Credited to Raki’ Capital account Rs 20,000
Question : J, M and R are sharing profits and losses equally. R retires and the goodwill is appearing in the books at Rs. 30,000. Goodwill of the firm is valued at Rs. 1,50,000. Calculate the net amount to be credited to R's Capital A/c.
Option 1: Rs 60,000
Option 2: Rs 50,000
Option 3: Rs 40,000
Option 4: Rs 10,000
Question : Bakul and Gokul were partners in a firm sharing profits and losses in the ratio of 2: 1 with capitals of Rs. 40,000 and Rs. 30,000 respectively. They decided to admit Nakul into partnership on conditions that he would bring in Rs.20,000 as his capital and Rs.6,000 for his share of goodwill for 1/4th share of profits. Half of the amount of goodwill was withdrawn by the existing partners. The capital of the partners in the New firm were to be arranged in profit sharing ratio on the basis of Nakul's Capital and excess or deficit capital to be adjusted in cash.
Option 1: Bakul withdrew Rs 2,000 and Gokul withdrew Rs 11,000
Option 2: Bakul bring Rs 2,000 and Gokul Bring Rs 11,000
Option 3: Bakul withdrew Rs 2,000 and Gokul brings Rs 11,000
Option 4: None of the above
Question : A and B are partners sharing profits and losses in the ratio of 3: 2. They admit C into partnership for 1/4th share, which he takes 1/6th from A and 1/12th from B. Goodwill exists in the books at Rs. 20,000. C brings Rs. 18,000 as goodwill out of his share of Rs. 30,000. It was decided that the shortfall in amount shall be debited to C's Current Account. Choose the correct journal entry.
Option 1: Debiting A and B 's capital account with Rs 12,000 and Rs 8000 and Crediting goodwill account with Rs 20,000
Option 2: Debiting premium for Goodwill account Rs 18,000 and debiting C's current account with Rs 12,000 and crediting A with Rs 20,000 and B with Rs 10,000
Option 3: Both 1 and 2
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