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Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.
- a)Credit Partner’s Capital Account with old profit sharing ratio for Rs. 1,40,000.
- b)Credit Partner’s Capital Account with new profit sharing ratio for Rs. 1,40,000.
- c)Credit A’s Account with Rs. 40,000 and debit B’s Capital Account with Rs. 10,000 and C’s Capital Account with Rs. 30,000.
- d)Credit Partner’s Capital Account with gaining ratio for Rs. 1,40,000.
Correct answer is option 'C'. Can you explain this answer?
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Verified Answer
Balances of A, B and C sharing profits and losses in proportionate to ...
Calculation of A's share in goodwill:
- A's capital = Rs. 2,00,000
- Total capital = Rs. 2,00,000 + Rs. 3,00,000 + Rs. 2,00,000 = Rs. 7,00,000
- A's share in goodwill = (A's capital / Total capital) * Goodwill
= (2,00,000 / 7,00,000) * 1,40,000
= Rs. 40,000
Calculation of B and C's new profit sharing ratio:
- Total capital after A's retirement = Rs. 3,00,000 + Rs. 2,00,000 = Rs. 5,00,000
- B's new capital = Rs. 3,00,000 + Rs. 40,000 = Rs. 3,40,000
- C's new capital = Rs. 2,00,000 + Rs. 40,000 = Rs. 2,40,000
- B and C's new profit sharing ratio = B's new capital : C's new capital
= 3,40,000 : 2,40,000
= 17 : 12
Adjustment entries:
- Credit Partner's Capital Account with old profit sharing ratio for Rs. 1,40,000.
- Credit Partner's Capital Account with new profit sharing ratio for Rs. 1,40,000.
- Credit A's Account with Rs. 40,000.
- Debit B's Capital Account with Rs. 10,000.
- Debit C's Capital Account with Rs. 30,000.
Explanation of adjustment entries:
- The first entry credits Partner's Capital Account with old profit sharing ratio for Rs. 1,40,000. This is to transfer A's share in goodwill to the remaining partners, B and C, in their old profit sharing ratio.
- The second entry credits Partner's Capital Account with new profit sharing ratio for Rs. 1,40,000. This is to adjust the change in profit sharing ratio between B and C after A's retirement.
- The third entry credits A's Account with Rs. 40,000. This is to pay A his share in the goodwill.
- The fourth entry debits B's Capital Account with Rs. 10,000. This is to adjust B's capital as per the new profit sharing ratio.
- The fifth entry debits C's Capital Account with Rs. 30,000. This is to adjust C's capital as per the new profit sharing ratio.
Hence, option C is the correct answer.
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- A's capital = Rs. 2,00,000
- Total capital = Rs. 2,00,000 + Rs. 3,00,000 + Rs. 2,00,000 = Rs. 7,00,000
- A's share in goodwill = (A's capital / Total capital) * Goodwill
= (2,00,000 / 7,00,000) * 1,40,000
= Rs. 40,000
Calculation of B and C's new profit sharing ratio:
- Total capital after A's retirement = Rs. 3,00,000 + Rs. 2,00,000 = Rs. 5,00,000
- B's new capital = Rs. 3,00,000 + Rs. 40,000 = Rs. 3,40,000
- C's new capital = Rs. 2,00,000 + Rs. 40,000 = Rs. 2,40,000
- B and C's new profit sharing ratio = B's new capital : C's new capital
= 3,40,000 : 2,40,000
= 17 : 12
Adjustment entries:
- Credit Partner's Capital Account with old profit sharing ratio for Rs. 1,40,000.
- Credit Partner's Capital Account with new profit sharing ratio for Rs. 1,40,000.
- Credit A's Account with Rs. 40,000.
- Debit B's Capital Account with Rs. 10,000.
- Debit C's Capital Account with Rs. 30,000.
Explanation of adjustment entries:
- The first entry credits Partner's Capital Account with old profit sharing ratio for Rs. 1,40,000. This is to transfer A's share in goodwill to the remaining partners, B and C, in their old profit sharing ratio.
- The second entry credits Partner's Capital Account with new profit sharing ratio for Rs. 1,40,000. This is to adjust the change in profit sharing ratio between B and C after A's retirement.
- The third entry credits A's Account with Rs. 40,000. This is to pay A his share in the goodwill.
- The fourth entry debits B's Capital Account with Rs. 10,000. This is to adjust B's capital as per the new profit sharing ratio.
- The fifth entry debits C's Capital Account with Rs. 30,000. This is to adjust C's capital as per the new profit sharing ratio.
Hence, option C is the correct answer.
Most Upvoted Answer
Balances of A, B and C sharing profits and losses in proportionate to ...
Retirement of Partner A:
Calculation of Goodwill:
- Total Capital of the firm = Rs. 7,00,000
- Goodwill of the entire firm = Rs. 1,40,000
- Goodwill to be credited to Partners Capital Accounts in old profit sharing ratio:
- A's share = (2,00,000/7,00,000) x 1,40,000 = Rs. 40,000
- B's share = (3,00,000/7,00,000) x 1,40,000 = Rs. 60,000
- C's share = (2,00,000/7,00,000) x 1,40,000 = Rs. 40,000
Adjustment Entries:
- Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000:
- Credit A's Capital Account with Rs. 40,000
- Credit B's Capital Account with Rs. 60,000
- Credit C's Capital Account with Rs. 40,000
- Credit As Account with Rs. 40,000 and debit B's Capital Account with Rs. 10,000 and C's Capital Account with Rs. 30,000:
- Debit B's Capital Account with Rs. 10,000
- Debit C's Capital Account with Rs. 30,000
- Credit A's Capital Account with Rs. 40,000
This adjustment ensures that A receives his share of the goodwill and B and C adjust their capital accounts accordingly based on the new profit sharing ratio.
Calculation of Goodwill:
- Total Capital of the firm = Rs. 7,00,000
- Goodwill of the entire firm = Rs. 1,40,000
- Goodwill to be credited to Partners Capital Accounts in old profit sharing ratio:
- A's share = (2,00,000/7,00,000) x 1,40,000 = Rs. 40,000
- B's share = (3,00,000/7,00,000) x 1,40,000 = Rs. 60,000
- C's share = (2,00,000/7,00,000) x 1,40,000 = Rs. 40,000
Adjustment Entries:
- Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000:
- Credit A's Capital Account with Rs. 40,000
- Credit B's Capital Account with Rs. 60,000
- Credit C's Capital Account with Rs. 40,000
- Credit As Account with Rs. 40,000 and debit B's Capital Account with Rs. 10,000 and C's Capital Account with Rs. 30,000:
- Debit B's Capital Account with Rs. 10,000
- Debit C's Capital Account with Rs. 30,000
- Credit A's Capital Account with Rs. 40,000
This adjustment ensures that A receives his share of the goodwill and B and C adjust their capital accounts accordingly based on the new profit sharing ratio.
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Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer?
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Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer?.
Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer?.
Solutions for Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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Here you can find the meaning of Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation of
Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer?, a detailed solution for Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? has been provided alongside types of Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice Balances of A, B and C sharing profits and losses in proportionate to their capitals, stood as follows: Capital Accounts: A Rs. 2,00,000; B Rs. 3,00,000 and C Rs. 2,00,000. A desired to retire form the firm, B and C share the future profits equally, Goodwill of the entire firm be valued at Rs. 1,40,000 and no Goodwill account being raised.a)Credit Partners Capital Account with old profit sharing ratio for Rs. 1,40,000.b)Credit Partners Capital Account with new profit sharing ratio for Rs. 1,40,000.c)Credit As Account with Rs. 40,000 and debit Bs Capital Account with Rs. 10,000 and Cs Capital Account with Rs. 30,000.d)Credit Partners Capital Account with gaining ratio for Rs. 1,40,000.Correct answer is option 'C'. Can you explain this answer? tests, examples and also practice Commerce tests.
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