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A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital account
- a)Rs.31,500: Rs.31,500: Rs.20,000
- b)Rs.31,500: Rs.31,500: Rs.30,000
- c)Rs.26,500: Rs.26,500: Rs.30,000
- d)Rs.20,000: Rs.20,000: Rs.20,000
Correct answer is option 'A'. Can you explain this answer?
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A and B having shares capital of Rs.20,000 each, share profit and loss...
Calculation of Capital Account Balance:
Given information:
- A and B have share capital of Rs. 20,000 each.
- A and B share profit and losses equally.
- C is admitted as an equal partner.
- Goodwill is valued at Rs. 30,000 (book value is NIL).
- C brings in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill.
- Goodwill account will not remain in the books.
- Profit on revaluation is Rs. 13,000.
Step 1: Calculation of New Profit Sharing Ratio:
Since C is admitted as an equal partner, the new profit sharing ratio will be 1:1:1.
Step 2: Allocation of Goodwill:
As per the new profit sharing ratio, the share of Goodwill for each partner will be Rs. 10,000 (30,000/3).
Step 3: Adjusting the Capital Accounts:
- A and B's capital accounts will be adjusted by deducting their share of Goodwill and adding their share of the profit on revaluation.
- C's capital account will be adjusted by adding his capital contribution and his share of the profit on revaluation.
Step 4: Calculation of Closing Capital Account Balance:
The closing balance of each partner's capital account can be calculated as follows:
A's Capital Account:
Opening balance = Rs. 20,000
Less: Share of Goodwill = Rs. 10,000
Add: Share of profit on revaluation = Rs. (13,000/3) = Rs. 4,333.33
Closing balance = Rs. 20,000 - Rs. 10,000 + Rs. 4,333.33 = Rs. 14,333.33
B's Capital Account:
Opening balance = Rs. 20,000
Less: Share of Goodwill = Rs. 10,000
Add: Share of profit on revaluation = Rs. (13,000/3) = Rs. 4,333.33
Closing balance = Rs. 20,000 - Rs. 10,000 + Rs. 4,333.33 = Rs. 14,333.33
C's Capital Account:
Opening balance = Rs. 20,000
Add: Capital contribution = Rs. 20,000
Add: Share of profit on revaluation = Rs. (13,000/3) = Rs. 4,333.33
Closing balance = Rs. 20,000 + Rs. 20,000 + Rs. 4,333.33 = Rs. 44,333.33
Therefore, the closing balance of the capital accounts will be:
A: Rs. 14,333.33
B: Rs. 14,333.33
C: Rs. 44,333.33
Summary:
The closing balance of the capital account is Rs. 14,333.33 for A and B, and Rs. 44,333.33 for C. Hence, the correct option is A) Rs. 31,500: Rs. 31,500: Rs. 20,000.
Given information:
- A and B have share capital of Rs. 20,000 each.
- A and B share profit and losses equally.
- C is admitted as an equal partner.
- Goodwill is valued at Rs. 30,000 (book value is NIL).
- C brings in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill.
- Goodwill account will not remain in the books.
- Profit on revaluation is Rs. 13,000.
Step 1: Calculation of New Profit Sharing Ratio:
Since C is admitted as an equal partner, the new profit sharing ratio will be 1:1:1.
Step 2: Allocation of Goodwill:
As per the new profit sharing ratio, the share of Goodwill for each partner will be Rs. 10,000 (30,000/3).
Step 3: Adjusting the Capital Accounts:
- A and B's capital accounts will be adjusted by deducting their share of Goodwill and adding their share of the profit on revaluation.
- C's capital account will be adjusted by adding his capital contribution and his share of the profit on revaluation.
Step 4: Calculation of Closing Capital Account Balance:
The closing balance of each partner's capital account can be calculated as follows:
A's Capital Account:
Opening balance = Rs. 20,000
Less: Share of Goodwill = Rs. 10,000
Add: Share of profit on revaluation = Rs. (13,000/3) = Rs. 4,333.33
Closing balance = Rs. 20,000 - Rs. 10,000 + Rs. 4,333.33 = Rs. 14,333.33
B's Capital Account:
Opening balance = Rs. 20,000
Less: Share of Goodwill = Rs. 10,000
Add: Share of profit on revaluation = Rs. (13,000/3) = Rs. 4,333.33
Closing balance = Rs. 20,000 - Rs. 10,000 + Rs. 4,333.33 = Rs. 14,333.33
C's Capital Account:
Opening balance = Rs. 20,000
Add: Capital contribution = Rs. 20,000
Add: Share of profit on revaluation = Rs. (13,000/3) = Rs. 4,333.33
Closing balance = Rs. 20,000 + Rs. 20,000 + Rs. 4,333.33 = Rs. 44,333.33
Therefore, the closing balance of the capital accounts will be:
A: Rs. 14,333.33
B: Rs. 14,333.33
C: Rs. 44,333.33
Summary:
The closing balance of the capital account is Rs. 14,333.33 for A and B, and Rs. 44,333.33 for C. Hence, the correct option is A) Rs. 31,500: Rs. 31,500: Rs. 20,000.
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Community Answer
A and B having shares capital of Rs.20,000 each, share profit and loss...
As it is given in the question that capitals of a and b is 20000 each hence A's capital is 20000 and b's capital is 20000 profit on revaluation is 13000 and revaluation profit is divided in old profit sharing ratio which is 1:1 so a's share in profit is 6500 and b's share same as 6500 and C's share of goodwill is 10000. which is divided in sacrificing ratio and sacrificing ratio of a and b is 1:1 so a's share of goodwill is 5000 and b's share is also 5000 hence closing capital balance of a is 20000+6500+5000 equals to 31500 and b's share is 20000+6500+5000 which is 31500 and C has a capital of 20000
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A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer?
Question Description
A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. 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 having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. 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 having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer?.
A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. 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 having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. 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 having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer?.
Solutions for A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer?, a detailed solution for A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A and B having shares capital of Rs.20,000 each, share profit and losses equally. They admit C as an equal partner and goodwill was valued as Rs. 30,000 (book value NIL). C is to bring in Rs. 20,000 as his capital and the necessary cash towards his share of Goodwill. Goodwill Account will not remain in the books. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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