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A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.
- a)A and B will share goodwill bought by C as 4,000:1,000.
- b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.
- c)Both.
- d)None.
Correct answer is option 'C'. Can you explain this answer?
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A and B are partners sharing the profit in the ratio of 3:2. They take...
The correct answer is C.
At the time of admission of a new partner, When capital goodwill is brought by the new partner it is divided among the partners in their gaining and sacrificing ratio. Calculation of sacrificing ratio:
Sacrificing Ratio = Old Ratio - New Ratio
A's sacrificing ratio = (3/5) - (1/3) = 4/15
B's sacrificing ratio = (2/5) - (1/3) = 1/15
Therefore, sacrificing ratio of A and B is 4 : 1 or 4000:1000
Since no already existing goodwill is given we assume it to be zero and when the goodwill is zero then the Goodwill is raised at the remaining premium which is not brought in by the partner at its full value.
Which is ₹5000
So value of goodwill is 5000*3=₹15000 which is to be raised in old ratio.
Most Upvoted Answer
A and B are partners sharing the profit in the ratio of 3:2. They take...
Treatment of C's capital and goodwill in the books of the firm:
1. Calculation of new profit sharing ratio:
- A and B's old ratio = 3:2
- Total old ratio = 3+2 = 5
- New ratio (after C's entry) = 1:1:1 (which is equal to 3:3:3)
- Total new ratio = 3+3+3 = 9
- C's share in the new ratio = 3/9 = 1/3
- A's share in the new ratio = 3/9 = 1/3
- B's share in the new ratio = 3/9 = 1/3
2. Treatment of C's capital:
- C was supposed to bring Rs. 25,000 against capital but brought only Rs. 30,000.
- Excess amount brought by C = Rs. 30,000 - Rs. 25,000 = Rs. 5,000
- This excess amount will be treated as a loan to the firm by C.
3. Treatment of C's goodwill:
- C was supposed to bring Rs. 10,000 against goodwill but brought only Rs. 5,000.
- Shortfall amount in goodwill brought by C = Rs. 10,000 - Rs. 5,000 = Rs. 5,000
- This shortfall amount will be written off in the books of the firm.
- Goodwill brought by C = Rs. 5,000
- Total goodwill of the firm = Rs. 10,000 + Rs. 5,000 = Rs. 15,000
- Goodwill will be shared by all partners in the new ratio (3:3:3) as follows:
- A's share in goodwill = (3/9) x Rs. 15,000 = Rs. 5,000
- B's share in goodwill = (3/9) x Rs. 15,000 = Rs. 5,000
- C's share in goodwill = (3/9) x Rs. 15,000 = Rs. 5,000
- A and B will share the goodwill bought by C in the ratio of 4,000:1,000 (as given in option a).
1. Calculation of new profit sharing ratio:
- A and B's old ratio = 3:2
- Total old ratio = 3+2 = 5
- New ratio (after C's entry) = 1:1:1 (which is equal to 3:3:3)
- Total new ratio = 3+3+3 = 9
- C's share in the new ratio = 3/9 = 1/3
- A's share in the new ratio = 3/9 = 1/3
- B's share in the new ratio = 3/9 = 1/3
2. Treatment of C's capital:
- C was supposed to bring Rs. 25,000 against capital but brought only Rs. 30,000.
- Excess amount brought by C = Rs. 30,000 - Rs. 25,000 = Rs. 5,000
- This excess amount will be treated as a loan to the firm by C.
3. Treatment of C's goodwill:
- C was supposed to bring Rs. 10,000 against goodwill but brought only Rs. 5,000.
- Shortfall amount in goodwill brought by C = Rs. 10,000 - Rs. 5,000 = Rs. 5,000
- This shortfall amount will be written off in the books of the firm.
- Goodwill brought by C = Rs. 5,000
- Total goodwill of the firm = Rs. 10,000 + Rs. 5,000 = Rs. 15,000
- Goodwill will be shared by all partners in the new ratio (3:3:3) as follows:
- A's share in goodwill = (3/9) x Rs. 15,000 = Rs. 5,000
- B's share in goodwill = (3/9) x Rs. 15,000 = Rs. 5,000
- C's share in goodwill = (3/9) x Rs. 15,000 = Rs. 5,000
- A and B will share the goodwill bought by C in the ratio of 4,000:1,000 (as given in option a).
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A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer?
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A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer?.
A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer?.
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A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill bought by C as 4,000:1,000.b)Goodwill will be raised to Rs. 15,000 in old profit sharing ratio.c)Both.d)None.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
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