CA Foundation Exam > CA Foundation Questions > A and B shares profit and losses equally. The...
Start Learning for Free
A and B shares 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. What will be the final effect of goodwill in the partner’s capital account?
- a)A & B’s account credited with Rs. 5,000 each.
- b)All partners’ account credited with Rs. 10,000 each.
- c)Only C’s account credited with Rs. 10,000 as cash bought in for goodwill.
- d)Final effect will be nil in each partner.
Correct answer is option 'A'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
A and B shares profit and losses equally. They admit C as an equal par...
Partnership and Goodwill
Partnership refers to a business entity formed by two or more persons who mutually agree to share profits and losses. Goodwill, on the other hand, refers to the intangible value of a business that arises due to its reputation, customer base, and other non-physical assets.
Admission of a New Partner
When a new partner is admitted to a partnership, the existing partners may decide to value the goodwill of the business. In this case, the goodwill is usually paid for by the new partner as part of their capital contribution. The amount paid for goodwill is then distributed among the existing partners in the profit sharing ratio.
Effect on Partners' Capital Accounts
The final effect of goodwill on partners' capital accounts depends on how the amount paid for goodwill is distributed among the partners. In this case, A and B share profits and losses equally and admit C as an equal partner. Goodwill is valued at Rs. 30,000, and C is to bring in Rs. 20,000 as capital and the necessary cash towards their share of goodwill. The Goodwill Account will not remain in the books.
The effect on the partners' capital accounts is as follows:
- A's capital account will be credited with Rs. 5,000 (half of the goodwill amount)
- B's capital account will be credited with Rs. 5,000 (half of the goodwill amount)
- C's capital account will be credited with Rs. 20,000 (capital contribution) and debited with Rs. 10,000 (share of goodwill)
Therefore, the final effect of goodwill on the partners' capital accounts is that A and B's accounts are credited with Rs. 5,000 each.
Partnership refers to a business entity formed by two or more persons who mutually agree to share profits and losses. Goodwill, on the other hand, refers to the intangible value of a business that arises due to its reputation, customer base, and other non-physical assets.
Admission of a New Partner
When a new partner is admitted to a partnership, the existing partners may decide to value the goodwill of the business. In this case, the goodwill is usually paid for by the new partner as part of their capital contribution. The amount paid for goodwill is then distributed among the existing partners in the profit sharing ratio.
Effect on Partners' Capital Accounts
The final effect of goodwill on partners' capital accounts depends on how the amount paid for goodwill is distributed among the partners. In this case, A and B share profits and losses equally and admit C as an equal partner. Goodwill is valued at Rs. 30,000, and C is to bring in Rs. 20,000 as capital and the necessary cash towards their share of goodwill. The Goodwill Account will not remain in the books.
The effect on the partners' capital accounts is as follows:
- A's capital account will be credited with Rs. 5,000 (half of the goodwill amount)
- B's capital account will be credited with Rs. 5,000 (half of the goodwill amount)
- C's capital account will be credited with Rs. 20,000 (capital contribution) and debited with Rs. 10,000 (share of goodwill)
Therefore, the final effect of goodwill on the partners' capital accounts is that A and B's accounts are credited with Rs. 5,000 each.
Free Test
FREE
| Start Free Test |
Community Answer
A and B shares profit and losses equally. They admit C as an equal par...
He is a equal partner so he has 1/3rd share of goodwill that is 10000 when a partner is admitted and doesn’t bring anything towards goodwill then this capital account has to be deducted and to be added to the old partners in the sacrificing ratio
Attention CA Foundation Students!
To make sure you are not studying endlessly, EduRev has designed CA Foundation study material, with Structured Courses, Videos, & Test Series. Plus get personalized analysis, doubt solving and improvement plans to achieve a great score in CA Foundation.
|
Explore Courses for CA Foundation exam
|
|
Top Courses for CA FoundationView all
A and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct answer is option 'A'. Can you explain this answer?
Question Description
A and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct 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 shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct 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 shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct answer is option 'A'. Can you explain this answer?.
A and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct 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 shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct 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 shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct answer is option 'A'. Can you explain this answer?.
Solutions for A and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct 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 and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
A and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct answer is option 'A'. Can you explain this answer?, a detailed solution for A and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of A and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A and B shares 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. What will be the final effect of goodwill in the partners capital account?a)A Bs account credited with Rs. 5,000 each.b)All partners account credited with Rs. 10,000 each.c)Only Cs account credited with Rs. 10,000 as cash bought in for goodwill.d)Final effect will be nil in each partner.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
|
|
Explore Courses for CA Foundation exam
|
|
Suggested Free Tests
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