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A and B having share capital of ` 20,000 each, share profits and losses equally. They admit C as an equal partner and goodwill was valued as ` 30,000 (book value NIL). C is to bring in ` 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not be shown in the books. If profit on revaluation is ` 13,000, find the closing balance of the capital accounts.?
Most Upvoted Answer
A and B having share capital of ` 20,000 each, share profits and losse...
C`s share of goodwill = 1/3 * 30000=10000

closing capital of
A=20000+5000+6500=31500
B=20000+5000+6500=31500
c=20000
Community Answer
A and B having share capital of ` 20,000 each, share profits and losse...
Calculation of new profit sharing ratio:

  • A and B share profits and losses equally

  • They admit C as an equal partner

  • Therefore, new profit sharing ratio will be 1/3 for each partner



Calculation of new capital:

  • A and B had share capital of ` 20,000 each

  • C brings in ` 20,000 as his capital

  • New total capital will be ` 60,000 (20,000 + 20,000 + 20,000)



Calculation of Goodwill:

  • Goodwill was valued as ` 30,000

  • C is to bring in the necessary cash towards his share of Goodwill

  • Goodwill Account will not be shown in the books



Calculation of Revaluation:

  • Profit on revaluation is ` 13,000

  • This profit will be shared equally among the three partners

  • Each partner will get ` 4,333 as their share of the revaluation profit



Calculation of closing balance of the capital accounts:

  • A and B had share capital of ` 20,000 each

  • C brings in ` 20,000 as his capital

  • Each partner will get ` 4,333 as their share of the revaluation profit

  • New capital for each partner will be ` 24,333 (20,000 + 4,333)

  • Therefore, the closing balance of the capital accounts for A, B, and C will be ` 24,333 each



In summary, the new profit sharing ratio is 1/3 for each partner, the new total capital is ` 60,000, the Goodwill was valued at ` 30,000, and the profit on revaluation is ` 13,000. Each partner will get ` 4,333 as their share of the revaluation profit and the closing balance of the capital accounts for A, B, and C will be ` 24,333 each.
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A and B having share capital of ` 20,000 each, share profits and losses equally. They admit C as an equal partner and goodwill was valued as ` 30,000 (book value NIL). C is to bring in ` 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not be shown in the books. If profit on revaluation is ` 13,000, find the closing balance of the capital accounts.?
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A and B having share capital of ` 20,000 each, share profits and losses equally. They admit C as an equal partner and goodwill was valued as ` 30,000 (book value NIL). C is to bring in ` 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not be shown in the books. If profit on revaluation is ` 13,000, find the closing balance of the capital accounts.? 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 having share capital of ` 20,000 each, share profits and losses equally. They admit C as an equal partner and goodwill was valued as ` 30,000 (book value NIL). C is to bring in ` 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not be shown in the books. If profit on revaluation is ` 13,000, find the closing balance of the capital accounts.? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B having share capital of ` 20,000 each, share profits and losses equally. They admit C as an equal partner and goodwill was valued as ` 30,000 (book value NIL). C is to bring in ` 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not be shown in the books. If profit on revaluation is ` 13,000, find the closing balance of the capital accounts.?.
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