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What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:
- a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificed
- b)Amount of compensation = Value’s of firm goodwill x share of profit sacrificed
- c)Amount of compensation = Profit of the year x share of profit gained
- d)Amount of compensation = Value’s of firm goodwill x share of profit gained
Correct answer is 'B'. Can you explain this answer?
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What should be the amount of compensation if the partners of the firm ...
The amount of compensation will be equal to the proportionate amount of goodwill. The valuation of goodwill of a firm, its treatment and adjustment is required at the time of change in existing profit sharing ratio among the partners.
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What should be the amount of compensation if the partners of the firm ...
Only the partner who sacrifice his share of profit will able to take the amount of goodwill in the sacrificing share from gaining partner.
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What should be the amount of compensation if the partners of the firm ...
There is no definitive answer to this question as the amount of compensation would depend on various factors such as the current profit share ratio, the financial position of the firm, the growth prospects, and the negotiation between the partners. However, some possible considerations for determining the amount of compensation could include:
1. Fairness: The partners may agree to compensate the partner who is giving up a higher share with a fair amount that reflects their contribution and the potential impact on their income.
2. Market value: The partners may consider the market value of the partner's share in determining the compensation amount. This could be based on industry standards or valuations of similar firms.
3. Future prospects: If changing the profit share ratio is expected to lead to increased profitability in the future, the partners may consider compensating the partner who is giving up a higher share less or even not at all.
4. Contribution and effort: The partners may consider the individual contributions and efforts of each partner in determining the compensation amount. This could include factors such as workload, responsibilities, and specific skills or expertise.
Ultimately, the partners would need to negotiate and come to an agreement on the amount of compensation that is fair and reasonable for all parties involved.
1. Fairness: The partners may agree to compensate the partner who is giving up a higher share with a fair amount that reflects their contribution and the potential impact on their income.
2. Market value: The partners may consider the market value of the partner's share in determining the compensation amount. This could be based on industry standards or valuations of similar firms.
3. Future prospects: If changing the profit share ratio is expected to lead to increased profitability in the future, the partners may consider compensating the partner who is giving up a higher share less or even not at all.
4. Contribution and effort: The partners may consider the individual contributions and efforts of each partner in determining the compensation amount. This could include factors such as workload, responsibilities, and specific skills or expertise.
Ultimately, the partners would need to negotiate and come to an agreement on the amount of compensation that is fair and reasonable for all parties involved.
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What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer?
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What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. 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 What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer?.
What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. 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 What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for What should be the amount of compensation if the partners of the firm decide to change their profit share ratio:a)Amount of compensation = Value’s of firm goodwill x share of loss sacrificedb)Amount of compensation = Value’s of firm goodwill x share of profit sacrificedc)Amount of compensation = Profit of the year x share of profit gainedd)Amount of compensation = Value’s of firm goodwill x share of profit gainedCorrect answer is 'B'. Can you explain this answer?.
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