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A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be?
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A and B are partners sharing profits in the ratio 3:2. On admission of...
Calculation of New Book Values
- Land appreciation: 10% of Rs. 80,000 = Rs. 8,000
- New book value of land = Rs. 80,000 + Rs. 8,000 = Rs. 88,000
- Building depreciation: 20% of Rs. 2,00,000 = Rs. 40,000
- New book value of building = Rs. 2,00,000 - Rs. 40,000 = Rs. 1,60,000
Calculation of Goodwill
- Total capital after admission of C = 5 parts (3+2)
- C's share = 1 part
- Goodwill = C's share of total capital * Total value of the firm
- Goodwill = 1/5 * (Rs. 88,000 + Rs. 1,60,000) = Rs. 49,600
Adjustment for Unrecorded Debtors and Creditors
- Unrecorded debtors bought in the books = Rs. 1,250
- Creditors not to be paid = Rs. 2,750
- Net adjustment = Rs. 1,250 - Rs. 2,750 = -Rs. 1,500 (credit to profit and loss account)
Calculation of New Profit Sharing Ratio
- A's share = 3/5 (3 out of total 5 parts)
- B's share = 2/5 (2 out of total 5 parts)
- C's share = 1/5
- Total share = 6/5 (3+2+1)
- A's new share = 3/6 = 1/2
- B's new share = 2/6 = 1/3
- C's share remains 1/5
Calculation of Revalued Profit or Loss
- New book value of assets = Rs. 88,000 + Rs. 1,60,000 = Rs. 2,48,000
- Old book value of assets = Rs. 80,000 + Rs. 2,00,000 = Rs. 2,80,000
- Revaluation loss = Old book value - New book value = Rs. 2,80,000 - Rs. 2,48,000 = Rs. 32,000
- Revaluation loss to be shared in new profit sharing ratio:
- A's share = 1/2
- B's share = 1/3
- C's share = 1/5
- Revaluation loss to be shared by A = 1/2 * Rs. 32,000 = Rs. 16,000 (debit to profit and loss account)
- Revaluation loss to be shared by B = 1/3 * Rs. 32,000 = Rs. 10,666.67 (debit to profit and loss account)
- Revaluation loss to be shared by C = 1/5 * Rs. 32,000 = Rs. 6,400 (debit to profit and loss account)
Final Calculation of Profit or Loss
- Total profit before revaluation = Rs. X
- Total credit to profit and
- Land appreciation: 10% of Rs. 80,000 = Rs. 8,000
- New book value of land = Rs. 80,000 + Rs. 8,000 = Rs. 88,000
- Building depreciation: 20% of Rs. 2,00,000 = Rs. 40,000
- New book value of building = Rs. 2,00,000 - Rs. 40,000 = Rs. 1,60,000
Calculation of Goodwill
- Total capital after admission of C = 5 parts (3+2)
- C's share = 1 part
- Goodwill = C's share of total capital * Total value of the firm
- Goodwill = 1/5 * (Rs. 88,000 + Rs. 1,60,000) = Rs. 49,600
Adjustment for Unrecorded Debtors and Creditors
- Unrecorded debtors bought in the books = Rs. 1,250
- Creditors not to be paid = Rs. 2,750
- Net adjustment = Rs. 1,250 - Rs. 2,750 = -Rs. 1,500 (credit to profit and loss account)
Calculation of New Profit Sharing Ratio
- A's share = 3/5 (3 out of total 5 parts)
- B's share = 2/5 (2 out of total 5 parts)
- C's share = 1/5
- Total share = 6/5 (3+2+1)
- A's new share = 3/6 = 1/2
- B's new share = 2/6 = 1/3
- C's share remains 1/5
Calculation of Revalued Profit or Loss
- New book value of assets = Rs. 88,000 + Rs. 1,60,000 = Rs. 2,48,000
- Old book value of assets = Rs. 80,000 + Rs. 2,00,000 = Rs. 2,80,000
- Revaluation loss = Old book value - New book value = Rs. 2,80,000 - Rs. 2,48,000 = Rs. 32,000
- Revaluation loss to be shared in new profit sharing ratio:
- A's share = 1/2
- B's share = 1/3
- C's share = 1/5
- Revaluation loss to be shared by A = 1/2 * Rs. 32,000 = Rs. 16,000 (debit to profit and loss account)
- Revaluation loss to be shared by B = 1/3 * Rs. 32,000 = Rs. 10,666.67 (debit to profit and loss account)
- Revaluation loss to be shared by C = 1/5 * Rs. 32,000 = Rs. 6,400 (debit to profit and loss account)
Final Calculation of Profit or Loss
- Total profit before revaluation = Rs. X
- Total credit to profit and
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A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be?
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A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be? 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 are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be?.
A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be? 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 are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be?.
Solutions for A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be? in English & in Hindi are available as part of our courses for CA Foundation.
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A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be?, a detailed solution for A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be? has been provided alongside types of A and B are partners sharing profits in the ratio 3:2. On admission of C for 1/5 th share. Land is appreciated by 10% ( book value of Rs. 80,000), building is depreciated by 20% (Rs. 2,00,000 ), unrecorded debtors Rs. 1,250 are bought in the books and creditors of Rs.2,750 need not to be paid. The profit or loss on revaluation will be? theory, EduRev gives you an
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