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A and B are partners sharing profits and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account?
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A and B are partners sharing profits and losses in the proportion 3/4 ...
Introduction:
In this question, we are given the balance sheet of A and B as at 31st March 2021 and we need to explain the treatment of goodwill when C is taken as a partner on 1st April 2021.
Treatment of Goodwill:
Goodwill is an intangible asset which represents the reputation and customer base of a business. When a new partner is admitted, the existing partners may have to sacrifice their share of goodwill to accommodate the new partner. In this case, C is unable to bring his share of goodwill, so it was decided that the due credit of goodwill be given to A and B for their sacrifice in favor of C through C's current account.
Calculation of Goodwill:
The value of goodwill is given as 200,000. The sacrificing ratio of A and B is 3:1. Therefore, the share of goodwill sacrificed by A and B will be in the same ratio.
- Share of A = (3/4) x 200,000 = 150,000
- Share of B = (1/4) x 200,000 = 50,000
Treatment in the books:
- A's current account will be credited with 150,000
- B's current account will be credited with 50,000
- C's current account will be debited with 200,000
Conclusion:
In conclusion, when a new partner is admitted, the existing partners may have to sacrifice their share of goodwill to accommodate the new partner. In this case, A and B sacrificed their share of goodwill in favor of C and the due credit of goodwill was given to them through C's current account.
In this question, we are given the balance sheet of A and B as at 31st March 2021 and we need to explain the treatment of goodwill when C is taken as a partner on 1st April 2021.
Treatment of Goodwill:
Goodwill is an intangible asset which represents the reputation and customer base of a business. When a new partner is admitted, the existing partners may have to sacrifice their share of goodwill to accommodate the new partner. In this case, C is unable to bring his share of goodwill, so it was decided that the due credit of goodwill be given to A and B for their sacrifice in favor of C through C's current account.
Calculation of Goodwill:
The value of goodwill is given as 200,000. The sacrificing ratio of A and B is 3:1. Therefore, the share of goodwill sacrificed by A and B will be in the same ratio.
- Share of A = (3/4) x 200,000 = 150,000
- Share of B = (1/4) x 200,000 = 50,000
Treatment in the books:
- A's current account will be credited with 150,000
- B's current account will be credited with 50,000
- C's current account will be debited with 200,000
Conclusion:
In conclusion, when a new partner is admitted, the existing partners may have to sacrifice their share of goodwill to accommodate the new partner. In this case, A and B sacrificed their share of goodwill in favor of C and the due credit of goodwill was given to them through C's current account.
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A and B are partners sharing profits and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account?
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A and B are partners sharing profits and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account? 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 and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account? 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 and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account?.
A and B are partners sharing profits and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account? 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 and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account? 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 and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account?.
Solutions for A and B are partners sharing profits and losses in the proportion 3/4 th and 1/4 th.As at 31 at March 2021 following is the balance sheet of A and B . They agreed to Take C in partnership as on 1 st april 2021. On the following conditions. 1.Goddwill valued at 200,000. C is unable to bring his share of Goodwill ,so it was decided that due credit of Goodwill be given to A and B for their sacrifice in favour of C through C 's current Account? in English & in Hindi are available as part of our courses for CA Foundation.
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