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A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital account
- a)Rs.31,500: Rs.31,500: Rs.20,000
- b)Rs.31,500: Rs.31,500: Rs.30,000
- c)Rs.26,500: Rs.26,500: Rs.30,000
- d)Rs.20,000: Rs.20,000: Rs.20,000
Correct answer is option 'A'. Can you explain this answer?
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A and B having shares capital of Rs.20,000 each, share profit and loss...
Given Information:
- A and B having shares capital of Rs.20,000 each.
- Share profit and losses equally.
- They admit C as an equal partner.
- Goodwill was valued at 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.
- Profit on revaluation is Rs. 13,000.
To find: Closing balance of the capital account
Solution:
Step 1: Calculation of New Profit Sharing Ratio
- A and B share profit and losses equally, so the ratio is 1:1 or 1/2:1/2.
- C is admitted as an equal partner, so the new ratio will be 1/3:1/3:1/3.
- Therefore, the new profit sharing ratio is A:B:C = 1/3:1/3:1/3 or 1:1:1.
Step 2: Calculation of C's Share of Goodwill
- Goodwill is valued at Rs. 30,000.
- C is to bring in the necessary cash towards his share of Goodwill, which means he needs to bring in 1/3 of Rs. 30,000.
- C's share of Goodwill = Rs. (30,000 × 1/3) = Rs. 10,000.
Step 3: Calculation of Total Capital
- A and B have a share capital of Rs. 20,000 each, so their total capital is Rs. (20,000 + 20,000) = Rs. 40,000.
- C is bringing in Rs. 20,000 as his share of capital.
- Therefore, the total capital after admitting C is Rs. (40,000 + 20,000) = Rs. 60,000.
Step 4: Calculation of Revalued Profit
- Revalued Profit = New Total Capital - Old Total Capital - Goodwill
- New Total Capital = Rs. 60,000 (as calculated in Step 3)
- Old Total Capital = Rs. 40,000 (as given in Step 3)
- Goodwill = Rs. 0 (as given in the question)
- Revalued Profit = Rs. (60,000 - 40,000 - 0) = Rs. 20,000.
Step 5: Distribution of Revalued Profit
- The new profit sharing ratio is 1:1:1, so the revalued profit will be distributed equally among the partners.
- Revalued Profit per partner = Rs. (20,000 ÷ 3) = Rs. 6,666.67.
Step 6: Calculation of Closing Balance of Capital Account
- A and B have a share capital of Rs. 20,000 each, so their opening balance will be Rs. 20,000.
- C is bringing in Rs. 20,000 as his share of capital, so his opening balance will be Rs. 20,000.
- A and B have an equal share in the revalued profit, so their share of revalued profit will be Rs. 6,666.67 each.
- C also has an equal share in the revalued profit, so
- A and B having shares capital of Rs.20,000 each.
- Share profit and losses equally.
- They admit C as an equal partner.
- Goodwill was valued at 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.
- Profit on revaluation is Rs. 13,000.
To find: Closing balance of the capital account
Solution:
Step 1: Calculation of New Profit Sharing Ratio
- A and B share profit and losses equally, so the ratio is 1:1 or 1/2:1/2.
- C is admitted as an equal partner, so the new ratio will be 1/3:1/3:1/3.
- Therefore, the new profit sharing ratio is A:B:C = 1/3:1/3:1/3 or 1:1:1.
Step 2: Calculation of C's Share of Goodwill
- Goodwill is valued at Rs. 30,000.
- C is to bring in the necessary cash towards his share of Goodwill, which means he needs to bring in 1/3 of Rs. 30,000.
- C's share of Goodwill = Rs. (30,000 × 1/3) = Rs. 10,000.
Step 3: Calculation of Total Capital
- A and B have a share capital of Rs. 20,000 each, so their total capital is Rs. (20,000 + 20,000) = Rs. 40,000.
- C is bringing in Rs. 20,000 as his share of capital.
- Therefore, the total capital after admitting C is Rs. (40,000 + 20,000) = Rs. 60,000.
Step 4: Calculation of Revalued Profit
- Revalued Profit = New Total Capital - Old Total Capital - Goodwill
- New Total Capital = Rs. 60,000 (as calculated in Step 3)
- Old Total Capital = Rs. 40,000 (as given in Step 3)
- Goodwill = Rs. 0 (as given in the question)
- Revalued Profit = Rs. (60,000 - 40,000 - 0) = Rs. 20,000.
Step 5: Distribution of Revalued Profit
- The new profit sharing ratio is 1:1:1, so the revalued profit will be distributed equally among the partners.
- Revalued Profit per partner = Rs. (20,000 ÷ 3) = Rs. 6,666.67.
Step 6: Calculation of Closing Balance of Capital Account
- A and B have a share capital of Rs. 20,000 each, so their opening balance will be Rs. 20,000.
- C is bringing in Rs. 20,000 as his share of capital, so his opening balance will be Rs. 20,000.
- A and B have an equal share in the revalued profit, so their share of revalued profit will be Rs. 6,666.67 each.
- C also has an equal share in the revalued profit, so
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A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer?
Question Description
A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer?.
A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer?.
Solutions for A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for Class 12.
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Here you can find the meaning of A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer?, a detailed solution for A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? has been provided alongside types of A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A and B having shares capital of Rs.20,000 each, share 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. If profit on revaluation is Rs. 13,000, find the closing balance of the capital accounta)Rs.31,500: Rs.31,500: Rs.20,000b)Rs.31,500: Rs.31,500: Rs.30,000c)Rs.26,500: Rs.26,500: Rs.30,000d)Rs.20,000: Rs.20,000: Rs.20,000Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice Class 12 tests.
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