Question : P and S are partners sharing profits in the ratio of 3 : 2. R is admitted with 1/5th share and he brings in Rs.42,000 as his share of goodwill which is Credited to the Capital Accounts of P and S respectively with Rs.31,500 and Rs.10,500. New profit sharing ratio will be -
Option 1: 3 : 2 : 5
Option 2: 9 : 7 : 4
Option 3: 7 : 9 : 4
Option 4: 3 : 1 : 5
Correct Answer: 9 : 7 : 4
Solution : As here P and S has 3:2 as ratio before , they admit a new partner R for a share of 1/5 and he brings ₹42,000 as his share of goodwill which is credited to capital accounts of P and S with Rs.31,500 and Rs.10,500, the goodwill is divided between P and S in the ratio :-
= 31,500 : 10,500
= 3 : 1 (in the ratio of goodwill ), we will calculate the sacrifice made by P and S in the favor of new partner R's share of 1/5 =
sacrifice made by P = 1/5 * 3/4
= 3/20
sacrifice made by S = 1/5 * 1/4
= 1/20
now from this sacrifice we will calculate, the new profit sharing ratio of P and S :-
P's new ratio = old ratio - sacrifice made by P
= 3/5 - 3/2
= 9/20
S's new ratio = old ratio - sacrifice made by S
= 2/5 - 1/20
= 7/20
R's ratio = 1/5 0r 4/20 [ 9/20 : 7/20 : 1/5 = (9 + 7 + 4) / 20 ]
so, the new profit sharing ratio between P and S and R will be :-
= 9/20 : 7/20 : 4/20
= 9 : 7 : 4
Hence the correct answer is option 2.
Question : A, B, C and D are partners sharing profits in the ratio of 1:4:3:2. D died on 15th December 2021 and the goodwill is valued at Rs.2,00,000. D's share of goodwill is to be adjusted into the capital accounts of A, B and C who decide to share future profits in the ratio of 4:3:3. Choose the correct journal entry.
Option 1: A debited by Rs 60,000 and debited B by Rs 20,000 and credited D by Rs 80,000
Option 2: Debited A by Rs 60,000 and credited B by Rs 20,000 and credited D by Rs 40,000
Option 3: Debited A by Rs 40,000 and B debited by Rs 40,000 and Credited D by Rs 80,000
Option 4: None of the above
Question : R, S and T are partners. Before changing their profit-sharing ratio to 5:3:2, they were sharing profit equally. Workmen's compensation reserve exited at Rs 1,00,000 against which a claim existed at Rs 20,000. The total amount that will be credited to their capital accounts in their old profit-sharing ratio will be?
Option 1: Rs 1,00,000
Option 2: Rs 80,000
Option 3: Rs 1,00,000 credited and Rs 20,000 debited
Option 4: Rs 20,000 credited and Rs 1,00,000 debited
Question : X, Y and Z are partners in a firm sharing profits in the ratio of 3: 2: 1. On 1 st April, 2009, retires from the firm .X and Z agree that the capital of the new firm shall be fixed at Rs. 2,10,000 in the profit-sharing ratio.The Capital Accounts of X and Z after all adjustments on the date of retirement showed balance of Rs. 1,45,000 and Rs. 63,000 respectively. the amount of actual cash to be brought in or to be paid to the partners will be
Option 1: Z debited Rs 10,500 and X credited by Rs 12,500
Option 2: Z debited Rs 10,500 and X debited by Rs 12,500
Option 3: Z credited by Rs 10,500 and xcredited by Rs 12,500
Option 4: Z debited by Rs 10,500 and Y credited by Rs 12,500
Question : The firm of P, Q and R with profit sharing ratio of 3: 6:1, h.ad the balance in General Reserve Account amounting Rs. 90,000. S joined as a new partner and the new profit sharing ratio was decided to be 3 : 3 : 3 : 1. Partners decide to keep the General Reserve unchanged in the books of accounts. The effect will be:
Option 1: Q will be credited by Rs. 27,000
Option 2: R will be debited by Rs. 27,000
Option 3: P will be credited by Rs. 36.000
Option 4: P will be debited by Rs. 36,000
Question : P, R and S are in partnership sharing profits 4/8, 3/8 and 1/8 respectively. It is provided under the partnership deed that on the death of any partner his share of goodwill is to be valued at one-half of the net profits credited to his account during the last 4 completed years (books of accounts are closed on 31st March).
R died on 1st April 2018. The firm’s profits for the last 4 years were as follows: 2015 (Profits Rs. 1,20,000); 2016 (Profits Rs.60,000); 2017 (Losses Rs.20,000) and 2018 (Profits Rs. 80,000). Determine the amount that should be credited to R in respect of his share of goodwill.
Option 1: Rs 90,000
Option 2: Rs 30,000
Option 3: Rs 45,000
Option 4: Rs 60,000
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