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Can you explain the answer of this question below:
A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :
- A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000
- B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000
- C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000
- D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000
The answer is d.
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Can you explain the answer of this question below:A, B, C are equal pa...
The effect of the change in profit sharing ratio and writing off of goodwill will be on the capital accounts of the partners.
Initially, all three partners had equal capital, so let's assume each partner had a capital of Rs. x.
After changing the profit sharing ratio to 4:3:2, the new capital contribution of each partner will be:
A = 4x/(4+3+2) = 4x/9
B = 3x/9 = x/3
C = 2x/9
The total capital of the firm will remain unchanged at 9x/9 = x.
Now, the partners have decided to write off the goodwill of Rs. 90,000 immediately. This means that the goodwill account will be closed and its balance will be transferred to the capital accounts of the partners according to their new profit sharing ratio.
The journal entry to write off the goodwill will be:
Goodwill account Dr. 90,000
To A's capital account 40,000
To B's capital account 30,000
To C's capital account 20,000
This entry reduces the value of the goodwill account to zero and increases the capital accounts of the partners according to their new profit sharing ratio.
Therefore, the accounts that will be affected by the change in profit sharing ratio and writing off of goodwill are the capital accounts of A and C, as they will receive a credit balance of Rs. 40,000 and Rs. 20,000 respectively due to the transfer of goodwill.
Initially, all three partners had equal capital, so let's assume each partner had a capital of Rs. x.
After changing the profit sharing ratio to 4:3:2, the new capital contribution of each partner will be:
A = 4x/(4+3+2) = 4x/9
B = 3x/9 = x/3
C = 2x/9
The total capital of the firm will remain unchanged at 9x/9 = x.
Now, the partners have decided to write off the goodwill of Rs. 90,000 immediately. This means that the goodwill account will be closed and its balance will be transferred to the capital accounts of the partners according to their new profit sharing ratio.
The journal entry to write off the goodwill will be:
Goodwill account Dr. 90,000
To A's capital account 40,000
To B's capital account 30,000
To C's capital account 20,000
This entry reduces the value of the goodwill account to zero and increases the capital accounts of the partners according to their new profit sharing ratio.
Therefore, the accounts that will be affected by the change in profit sharing ratio and writing off of goodwill are the capital accounts of A and C, as they will receive a credit balance of Rs. 40,000 and Rs. 20,000 respectively due to the transfer of goodwill.
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Can you explain the answer of this question below:A, B, C are equal pa...
Pass the entry of goodwill raised and written off Compare the two - you will see that A's capital a/c is credited by 30000 in the first entry and debited by 40000 in the second entry (written off entry) so A's capital is more by 10000 in the second entry on the debit side. B's capital - 30000 debit 30000 credit will get canceled. And C's credit side is more by 10000. So you will get option d as correct entry
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Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d.
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Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d..
Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. for CA Foundation 2025 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. covers all topics & solutions for CA Foundation 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d..
Solutions for Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning of Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. defined & explained in the simplest way possible. Besides giving the explanation of
Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d., a detailed solution for Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. has been provided alongside types of Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. theory, EduRev gives you an
ample number of questions to practice Can you explain the answer of this question below:A, B, C are equal partners, they wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill to Rs. 90,000 but want to write it off immediately. The effected accounts will be :A:C’s Capital A/c Dr. 10,000To A’s Capital A/c 10,000B:B’s Capital A/c Dr. A/c 10,000To A’s Capital A/c 10,000C:C’s Capital A/c Dr. 10,000To B’s Capital A/c 10,000D:A’s Capital A/c Dr. 10,000To C’s Capital A/c 10,000The answer is d. tests, examples and also practice CA Foundation tests.
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