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They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.?
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They decided to admit C as a partner for 1/5th share, which he acquire...
Admission of Partner C and Adjustments
Introduction:
When a new partner is admitted into a partnership firm, certain adjustments need to be made to ensure that the new partner's capital, assets, and liabilities are appropriately accounted for. In this case, Partner C has been admitted for a 1/5th share, which is acquired equally from Partner A and Partner B. Several adjustments have been made to accommodate this admission.
Adjustment a: Investment Revaluation
- The investment of the firm is revalued at ₹60,000.
- This adjustment ensures that the investment is recorded at its fair market value.
- The increase in value will result in an increase in the capital of the firm.
Adjustment b: Undervalued Stock
- The stock of the firm was undervalued by ₹15,000.
- This adjustment corrects the undervaluation by increasing the value of the stock.
- The increase in value will result in an increase in the capital of the firm.
Adjustment c: Bad Debts and Provision for Doubtful Debts
- Bad debts amounting to ₹15,000 are written off.
- This adjustment removes the impact of the bad debts on the firm's accounts.
- Additionally, a provision for doubtful debts is created at a rate of 10%.
- This provision is made to account for potential future losses from doubtful debts.
- Both the write-off and provision will decrease the capital of the firm.
Adjustment d: Goodwill
- Partner C brings his share of goodwill in cash, amounting to ₹90,000.
- Goodwill represents the value of the firm's reputation, customer base, and other intangible assets.
- By bringing in cash, Partner C compensates the existing partners for the value of the firm's goodwill.
- The cash brought in will increase the capital of the firm.
Adjustment e: Additional Capital
- Partner C further brings in 1/5th of the total capital of the firm as his capital.
- This additional capital increases the overall capital of the firm.
- It ensures that Partner C's capital contribution is proportionate to his share in the firm.
Conclusion:
In summary, the admission of Partner C as a new partner requires adjustments to be made to account for the revaluation of investments, undervalued stock, bad debts and provision for doubtful debts, goodwill, and additional capital brought in by Partner C. These adjustments ensure that the financial accounts of the partnership accurately reflect the changes resulting from the admission of the new partner.
Introduction:
When a new partner is admitted into a partnership firm, certain adjustments need to be made to ensure that the new partner's capital, assets, and liabilities are appropriately accounted for. In this case, Partner C has been admitted for a 1/5th share, which is acquired equally from Partner A and Partner B. Several adjustments have been made to accommodate this admission.
Adjustment a: Investment Revaluation
- The investment of the firm is revalued at ₹60,000.
- This adjustment ensures that the investment is recorded at its fair market value.
- The increase in value will result in an increase in the capital of the firm.
Adjustment b: Undervalued Stock
- The stock of the firm was undervalued by ₹15,000.
- This adjustment corrects the undervaluation by increasing the value of the stock.
- The increase in value will result in an increase in the capital of the firm.
Adjustment c: Bad Debts and Provision for Doubtful Debts
- Bad debts amounting to ₹15,000 are written off.
- This adjustment removes the impact of the bad debts on the firm's accounts.
- Additionally, a provision for doubtful debts is created at a rate of 10%.
- This provision is made to account for potential future losses from doubtful debts.
- Both the write-off and provision will decrease the capital of the firm.
Adjustment d: Goodwill
- Partner C brings his share of goodwill in cash, amounting to ₹90,000.
- Goodwill represents the value of the firm's reputation, customer base, and other intangible assets.
- By bringing in cash, Partner C compensates the existing partners for the value of the firm's goodwill.
- The cash brought in will increase the capital of the firm.
Adjustment e: Additional Capital
- Partner C further brings in 1/5th of the total capital of the firm as his capital.
- This additional capital increases the overall capital of the firm.
- It ensures that Partner C's capital contribution is proportionate to his share in the firm.
Conclusion:
In summary, the admission of Partner C as a new partner requires adjustments to be made to account for the revaluation of investments, undervalued stock, bad debts and provision for doubtful debts, goodwill, and additional capital brought in by Partner C. These adjustments ensure that the financial accounts of the partnership accurately reflect the changes resulting from the admission of the new partner.
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They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.?
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They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.?.
They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.?.
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They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.?, a detailed solution for They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.? has been provided alongside types of They decided to admit C as a partner for 1/5th share, which he acquires equally from A and B. Following adjustments were made: a) Investment revalued at ₹ 60,000. b) Stock was undervalued by ₹ 15,000. c) Write off bad debts ₹ 15,000 and also create a provision for doubtful debts @ 10%. d) C brought his share of goodwill in cash ₹ 90,000. e) C further brought 1/5th equal to total capital of the firm as his capital.? theory, EduRev gives you an
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