CA Foundation Exam > CA Foundation Questions > A, B and C were partners sharing profits and ...
Start Learning for Free
A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?
- a)Credited to Revaluation Account at Rs. 24,000.
- b)Adjusted through partners capital account in gaining/sacrificing ratio.
- c)Only A’s capital account credited with Rs. 12,000
- d)Only A’s capital account credited with Rs. 24,000
Correct answer is option 'B'. Can you explain this answer?
| FREE This question is part of | Download PDF Attempt this Test |
Most Upvoted Answer
A, B and C were partners sharing profits and losses in the ratio of 3:...
's capital account will be credited with Rs. 12,000 and B and C's capital accounts will be debited with Rs. 8,000 each in gaining/sacrificing ratio.
The correct answer is b) Adjusted through partners capital account in gaining/sacrificing ratio.
When a partner retires, the goodwill of the firm needs to be valued and distributed among the remaining partners. In this case, the total goodwill is valued at Rs. 24,000.
As per the profit sharing ratio, A, B and C are entitled to 3/6, 2/6 and 1/6 of the goodwill respectively. However, since A is retiring, only B and C will be sharing the goodwill.
The gaining/sacrificing ratio between B and C needs to be calculated. Let's assume that B is gaining and C is sacrificing. The gaining/sacrificing ratio will be 2:1 (as per the profit sharing ratio).
Now, the goodwill of Rs. 24,000 will be distributed between B and C in the gaining/sacrificing ratio of 2:1. B will be entitled to 2/3 of the goodwill (i.e. Rs. 16,000) and C will be entitled to 1/3 of the goodwill (i.e. Rs. 8,000).
To adjust this in the capital accounts of B and C, B's capital account will be credited with Rs. 16,000 and C's capital account will be debited with Rs. 8,000. This will ensure that B's capital increases and C's capital decreases in the same ratio as the gaining/sacrificing ratio.
Therefore, the correct treatment for goodwill in this case is b) Adjusted through partners capital account in gaining/sacrificing ratio.
The correct answer is b) Adjusted through partners capital account in gaining/sacrificing ratio.
When a partner retires, the goodwill of the firm needs to be valued and distributed among the remaining partners. In this case, the total goodwill is valued at Rs. 24,000.
As per the profit sharing ratio, A, B and C are entitled to 3/6, 2/6 and 1/6 of the goodwill respectively. However, since A is retiring, only B and C will be sharing the goodwill.
The gaining/sacrificing ratio between B and C needs to be calculated. Let's assume that B is gaining and C is sacrificing. The gaining/sacrificing ratio will be 2:1 (as per the profit sharing ratio).
Now, the goodwill of Rs. 24,000 will be distributed between B and C in the gaining/sacrificing ratio of 2:1. B will be entitled to 2/3 of the goodwill (i.e. Rs. 16,000) and C will be entitled to 1/3 of the goodwill (i.e. Rs. 8,000).
To adjust this in the capital accounts of B and C, B's capital account will be credited with Rs. 16,000 and C's capital account will be debited with Rs. 8,000. This will ensure that B's capital increases and C's capital decreases in the same ratio as the gaining/sacrificing ratio.
Therefore, the correct treatment for goodwill in this case is b) Adjusted through partners capital account in gaining/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, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. Can you explain this answer?
Question Description
A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. 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, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. 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, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. Can you explain this answer?.
A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. 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, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. 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, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. Can you explain this answer?.
Solutions for A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. 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 sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. Can you explain this answer?, a detailed solution for A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. Can you explain this answer? has been provided alongside types of A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A, B and C were partners sharing profits and losses in the ratio of 3:2:1. A retiredand Goodwill of the firm is to be valued at Rs. 24,000 . What will be the treatment for goodwill?a)Credited to Revaluation Account at Rs. 24,000.b)Adjusted through partners capital account in gaining/sacrificing ratio.c)Only A’s capital account credited with Rs. 12,000d)Only A’s capital account credited with Rs. 24,000Correct answer is option 'B'. 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