Question : Hari, Ravi and Kavi were partners in a firm sharing profits in the ratio of 3: 2: 1. They admitted Guru as a new partner for 1/7th share in the profits. The new profit-sharing ratio will be 2:2:2:1 respectively. Guru brought Rs. 3,00,000 for his capital and Rs. 45,000 for his 1/7th share of goodwill. Kavi's capital account at the time of adjustment of goodwill will be
Option 1: Credited Rs 37,500
Option 2: Debited Rs 37,500
Option 3: Credited Rs 45,000
Option 4: Debited Rs 15,000
Correct Answer: Debited Rs 37,500
Solution : Answer = Debited Rs 37500 Old Ratio of Hari, Ravi and Kavi =3:2:1 New Ratio of Hari, Ravi, Kavi and Guru =2: 2: 2: 1 Sacrifice or Gain : Hari =$\frac{3}{6}-\frac{2}{7}=\frac{21-12}{42}=\frac{9}{42}$ ( Sacrifice) Ravi= $\frac{2}{6}-\frac{2}{7}=\frac{14-12}{42}=\frac{2}{42}$ (Sacrifice) Kavi= $\frac{1}{6}-\frac{2}{7}=\frac{7-12}{42}=\frac{5}{42}$(Gain) Guru =$\frac{1}{7} \text { or } \frac{6}{42}$ (Gain) On Guru's admission Kavi has also gained to the extent of $\frac{5}{42}$ Hence, he must also compensate Hari and Ravi to the extent of $\frac{5}{42}$ of the firm's goodwill. For $\frac{1}{7}$ share, goodwill brought in by Guru= Rs. 45,000 ,
Total goodwill of the firm based on Guru's share =45,000×y=Rs .3,15,000 Kavi to compensate - Rs. $3,15,000 \times \frac{5}{42}$= Rs. 37,500 . Total Goodwill contributed by Guru and Kavi (45,000+37,500)= Rs. 82,500 will be distributed between Hari and Ravi in their sacrificing ratio. Hari's share $=82,500 \times \frac{9}{11}=$ Rs. 67,500. Ravi's share $=82,500 \times \frac{2}{11}=$ Rs. 15,000. Hence, the correct option is 2.
Question : A and B are partners sharing profits & losses as 2: 1. C and D are admitted and the profit sharing ratio becomes 4: 2: 3: 1. Goodwill is valued at Rs.2,00,000. D brings the required goodwill and Rs.50,000 cash for Capital. C brings in Rs.50,000 cash and Rs. 40,000 worth of stock as his capital in addition to the required amount of goodwill in cash. Cash contributed by the new partner at the time of admission and the amount of goodwill brought by a new partner will be
Option 1: Debited bank with Rs 50,000 and credited premium for goodwill Rs 2,00,000
Option 2: Debited bank with Rs 1,10,000 and credited premium for goodwill Rs 60,000
Option 3: Debited bank Rs 50,000 and credited premium for goodwill Rs 2,00,000
Option 4: None of the above
Question : At the time of change in profit sharing ratio Sacrificing partner is ------ and gaining partner is ----- for the adjustment of goodwill.
Option 1: Credited, debited
Option 2: Debited, credited
Option 3: Debited, debited
Option 4: Credited, credited
Question : A, B and C were partners sharing profits in the ratio of 2: 3: 4. On 15th March 2018 B died and the new profit-sharing ratio of A and C was 5: 4. On B's death the goodwill of the firm was valued at Rs.75,000. Choose the correct Journal entry with respect to the treatment of goodwill.
Option 1: Debited A and Credited B Rs 25,000
Option 2: Credited A and debited B Rs 25,000
Option 3: Debited B and Credited C Rs 25,000
Option 4: Debited A Rs 12,500, debited C Rs 12,500 and Credited B Rs 25,000
Question : D, E, F, P and Z were partners in a firm sharing profits in the ratio 5:4:3:2:1 respectively. Unfortunately, P and Z met with a tragic car accident in which both of them died. The goodwill of the firm was valued at Rs. 1,50,000 and D, E and F decided to share future profits in the ratio of 4:6:5 respectively. At the time of adjustment of goodwill, P's capital account will be debited/ credited by Rs ---------.
Option 1: Debited by Rs 10,000
Option 2: Credited by Rs 20,000
Option 3: Debited by Rs 20,000
Option 4: Credited by Rs 10,000
Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile