Question : Match the following :
|
i. |
Sacrificing Ratio |
A. |
Nominal Account |
|
ii. |
Gaining Ratio |
B. |
Reconstitution of Partnership |
|
iii. |
Revaluation Account |
C |
New Ratio - Old Ratio |
|
Iv |
Admission of a Partner |
D. |
Old Ratio - New Ratio |
Option 1: i- B, ii-C, iii-A, iv-D
Option 2: i- D, ii-B, iii-A, iv-C
Option 3: i- D, ii-C, iii-A, iv-B
Option 4: i- D, ii-C, iii-B, iv-A
Correct Answer: i- D, ii-C, iii-A, iv-B
Solution : Answer = i- D, ii-C, iii-A, iv-B
The Sacrificing Ratio is calculated as the Old Ratio minus the New Ratio during the reconstitution of a partnership, specifically upon the admission of a new partner. On the other hand, the Gaining Ratio is computed as the New Ratio minus the Old Ratio during the same reconstitution process. Revaluation Accounts (A) are nominal accounts reflecting changes in asset values during reconstitution. Admission of a partner involves changing the partnership's composition, affecting profit-sharing ratios and possibly asset valuations (Reconstitution of Partnership).
Hence, the correct option is 3.
Related Questions
Question : E and F were partners in a firm sharing profits in the ratio of 3: 1. They admitted G as a new partner on 1-3-2017 for 1/3rd share. It was decided that E, F and G will share future profits equally. G brought Rs.50,000 in cash and machinery worth Rs.70,000 for his share of profit as premium for goodwill.
Which journal entries will be passed for accounting for Goodwill .
Option 1:
Which journal entries will be passed for accounting for Goodwill .
|
Cash A/c |
Dr. |
50,000 |
||
|
Machinery A/c |
Dr. |
70,000 |
||
|
To Premium for Goodwill A/c |
1,20,000 |
|||
|
(Cash and Machinery contributed by G on his admission, as his share of goodwill premium) |
||||
|
Premium for Goodwill A/c |
Dr. |
1,20,000 |
||
|
F’s Capital A/c |
Dr. |
30,000 |
||
|
To E’s Capital A/c |
1,50,000 |
|||
|
(Premium for goodwill brought in by G Credited to E along with 1/12 of the goodwill to be contributed by F due to gain in his profit sharing ratio) |
||||
Option 2:
|
Date |
Particulars |
L.F. |
Dr. (Rs.) |
Cr. (Rs.) |
|
|
2017 |
Cash A/c |
Dr. |
50,000 |
||
|
March 1 |
Machinery A/c |
Dr. |
70,000 |
||
|
To Premium for Goodwill A/c |
1,20,000 |
||||
|
(Cash and Machinery contributed by G on his admission, as his share of goodwill premium) |
|||||
|
March 1 |
Premium for Goodwill A/c |
Dr. |
1,50,000 |
||
|
. |
|||||
|
To E’s Capital A/c |
1,50,000 |
||||
Option 3:
|
Cash A/c |
Dr. |
50,000 |
||
|
Machinery A/c |
Dr. |
70,000 |
||
|
To Premium for Goodwill A/c |
1,20,000 |
|||
|
(Cash and Machinery contributed by G on his admission, as his share of goodwill premium) |
||||
|
Premium for Goodwill A/c |
Dr. |
1,20,000 |
||
|
To F’s Capital A/c |
. |
30,000 |
||
|
To E’s Capital A/c |
90,000 |
Option 4: None of the above
