CA Foundation Exam > CA Foundation Questions > A, B and C were partners in a firm sharing pr...
Start Learning for Free
A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.
- a)Rs. 70,820
- b)Rs. 50,820
- c)Rs. 25,820
- d)Rs. 58,820
Correct answer is option 'A'. Can you explain this answer?
Most Upvoted Answer
A, B and C were partners in a firm sharing profits and losses in the r...
Given information:
- A, B, and C are partners in a firm sharing profits and losses in the ratio of 2:2:1.
- Capital balance of A and B is Rs. 50,000 each, while for C it is Rs. 25,000.
- B is retiring from the firm and the balance in reserve is Rs. 15,000.
- Goodwill of the firm is valued at Rs. 30,000.
- Profit on revaluation is Rs. 7,050.
To find: Amount transferred to the loan account of B.
Solution:
Step 1: Calculate the total capital of the firm before B's retirement.
- Total capital = Capital of A + Capital of B + Capital of C
- Total capital = Rs. 50,000 + Rs. 50,000 + Rs. 25,000
- Total capital = Rs. 1,25,000
Step 2: Calculate the new profit sharing ratio after B's retirement.
- A and C will continue to share profits and losses in the same ratio of 2:1.
- B's share will be transferred to his loan account.
- New profit sharing ratio = 2:1
- B's share = 2/(2+1) = 2/3
- A's share = 2/(2+1) = 2/3
- C's share = 1/(2+1) = 1/3
Step 3: Calculate the amount of goodwill to be debited/credited to partners' capital accounts.
- Goodwill = Rs. 30,000
- Goodwill to be debited/credited to A and C's capital accounts = Goodwill x (new ratio - old ratio)/total ratio
- Goodwill to be debited/credited to A and C's capital accounts = Rs. 30,000 x (2/3 - 2/5)/(2/3 + 2/3 + 1/3)
- Goodwill to be debited/credited to A and C's capital accounts = Rs. 7,200 (to be credited)
Step 4: Calculate the total revaluation profit to be distributed among partners.
- Revaluation profit = Rs. 7,050
- Revaluation profit to be distributed among A and C = Revaluation profit x (new ratio - old ratio)/total ratio
- Revaluation profit to be distributed among A and C = Rs. 7,050 x (2/3 - 2/5)/(2/3 + 2/3 + 1/3)
- Revaluation profit to be distributed among A and C = Rs. 1,710
Step 5: Prepare the retirement account of B.
- Balance in reserve = Rs. 15,000
- Share of goodwill credited to A and C = Rs. 7,200
- Share of revaluation profit distributed to A and C = Rs. 1,710
- Total amount to be transferred to B's loan account = (Capital of B + Interest on drawings + Share of revaluation loss) - (Balance in reserve + Share of goodwill credited to A and C + Share of revaluation profit distributed to A and C)
- Total amount to be transferred to B's loan account = (Rs. 50,000 + 0 + 0) - (Rs.
- A, B, and C are partners in a firm sharing profits and losses in the ratio of 2:2:1.
- Capital balance of A and B is Rs. 50,000 each, while for C it is Rs. 25,000.
- B is retiring from the firm and the balance in reserve is Rs. 15,000.
- Goodwill of the firm is valued at Rs. 30,000.
- Profit on revaluation is Rs. 7,050.
To find: Amount transferred to the loan account of B.
Solution:
Step 1: Calculate the total capital of the firm before B's retirement.
- Total capital = Capital of A + Capital of B + Capital of C
- Total capital = Rs. 50,000 + Rs. 50,000 + Rs. 25,000
- Total capital = Rs. 1,25,000
Step 2: Calculate the new profit sharing ratio after B's retirement.
- A and C will continue to share profits and losses in the same ratio of 2:1.
- B's share will be transferred to his loan account.
- New profit sharing ratio = 2:1
- B's share = 2/(2+1) = 2/3
- A's share = 2/(2+1) = 2/3
- C's share = 1/(2+1) = 1/3
Step 3: Calculate the amount of goodwill to be debited/credited to partners' capital accounts.
- Goodwill = Rs. 30,000
- Goodwill to be debited/credited to A and C's capital accounts = Goodwill x (new ratio - old ratio)/total ratio
- Goodwill to be debited/credited to A and C's capital accounts = Rs. 30,000 x (2/3 - 2/5)/(2/3 + 2/3 + 1/3)
- Goodwill to be debited/credited to A and C's capital accounts = Rs. 7,200 (to be credited)
Step 4: Calculate the total revaluation profit to be distributed among partners.
- Revaluation profit = Rs. 7,050
- Revaluation profit to be distributed among A and C = Revaluation profit x (new ratio - old ratio)/total ratio
- Revaluation profit to be distributed among A and C = Rs. 7,050 x (2/3 - 2/5)/(2/3 + 2/3 + 1/3)
- Revaluation profit to be distributed among A and C = Rs. 1,710
Step 5: Prepare the retirement account of B.
- Balance in reserve = Rs. 15,000
- Share of goodwill credited to A and C = Rs. 7,200
- Share of revaluation profit distributed to A and C = Rs. 1,710
- Total amount to be transferred to B's loan account = (Capital of B + Interest on drawings + Share of revaluation loss) - (Balance in reserve + Share of goodwill credited to A and C + Share of revaluation profit distributed to A and C)
- Total amount to be transferred to B's loan account = (Rs. 50,000 + 0 + 0) - (Rs.
Free Test
FREE
| Start Free Test |
Community Answer
A, B and C were partners in a firm sharing profits and losses in the r...
|
Explore Courses for CA Foundation exam
|
|
Similar CA Foundation Doubts
Top Courses for CA FoundationView all
A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer?
Question Description
A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer?.
A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer?.
Solutions for A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
Download more important topics, notes, lectures and mock test series for CA Foundation Exam by signing up for free.
Here you can find the meaning of A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer?, a detailed solution for A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A, B and C were partners in a firm sharing profits and losses in the ratio of 2:2:1. Respectively with the capital balance of Rs. 50,000 for A and B, for C Rs. 25,000. B declared to retire from the firm and balance in reserve on the date was Rs. 15,000. If goodwill of the firm was valued as Rs. 30,000 and profit on revaluation was Rs. 7,050 then what amount will be transferred to the loan account of B.a)Rs. 70,820b)Rs. 50,820c)Rs. 25,820d)Rs. 58,820Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Signup for Free!
Signup to see your scores go up within 7 days! Learn & Practice with 1000+ FREE Notes, Videos & Tests.
|
© EduRev
|
Education Revolution
|
|
Signup to see your scores
go up within 7 days!
Access 1000+ FREE Docs, Videos and Tests
Takes less than 10 seconds to signup