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P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash will P & Q withdraw from the firm on account of goodwill?
- a)Rs. 3,000 and Rs. 1,500
- b)Rs. 6,000 and Rs. 3,000
- c)Nil
- d)None of the above
Correct answer is option 'A'. Can you explain this answer?
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P and Q are partners sharing Profits in the ratio of 2:1. R is admitte...
Amt. brought in by R for goodwill is 9000. This amt. P and Q will distribute among themselves in their sacrificing ratio, which is 2:1. So, share of P and Q in goodwill is 6000 and 3000 respectively. And in question it is written that both P and Q withdraw half of the share of goodwill. So P will withdraw 3000 and Q will withdraw 1500. So correct ans is 'A'.
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P and Q are partners sharing Profits in the ratio of 2:1. R is admitte...
Understanding the Partnership and Goodwill Transaction
In this scenario, we have three partners: P, Q, and R. P and Q share profits in a ratio of 2:1. R is admitted into the partnership by contributing capital and paying for goodwill.
Key Points about Goodwill Payment
- R's Contribution: R pays Rs. 9,000 for goodwill, which represents the value of the business that is being shared among the partners.
- Withdrawal of Goodwill: According to the terms, half of the goodwill amount is to be withdrawn by P and Q.
Calculating the Goodwill Distribution
1. Total Goodwill Amount: Rs. 9,000
2. Amount Withdrawn by P and Q:
- Half of Rs. 9,000 = Rs. 4,500
3. Distribution of Rs. 4,500: Since P and Q share profits in the ratio of 2:1, the withdrawal amount will also be distributed in the same ratio:
- P's Share: (2/3) of Rs. 4,500 = Rs. 3,000
- Q's Share: (1/3) of Rs. 4,500 = Rs. 1,500
Conclusion
Thus, upon R's admission, P will withdraw Rs. 3,000 and Q will withdraw Rs. 1,500 from the firm on account of goodwill. Therefore, the correct answer is option 'A': Rs. 3,000 and Rs. 1,500.
In this scenario, we have three partners: P, Q, and R. P and Q share profits in a ratio of 2:1. R is admitted into the partnership by contributing capital and paying for goodwill.
Key Points about Goodwill Payment
- R's Contribution: R pays Rs. 9,000 for goodwill, which represents the value of the business that is being shared among the partners.
- Withdrawal of Goodwill: According to the terms, half of the goodwill amount is to be withdrawn by P and Q.
Calculating the Goodwill Distribution
1. Total Goodwill Amount: Rs. 9,000
2. Amount Withdrawn by P and Q:
- Half of Rs. 9,000 = Rs. 4,500
3. Distribution of Rs. 4,500: Since P and Q share profits in the ratio of 2:1, the withdrawal amount will also be distributed in the same ratio:
- P's Share: (2/3) of Rs. 4,500 = Rs. 3,000
- Q's Share: (1/3) of Rs. 4,500 = Rs. 1,500
Conclusion
Thus, upon R's admission, P will withdraw Rs. 3,000 and Q will withdraw Rs. 1,500 from the firm on account of goodwill. Therefore, the correct answer is option 'A': Rs. 3,000 and Rs. 1,500.
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P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash will P & Q withdraw from the firm on account of goodwill?a)Rs. 3,000 and Rs. 1,500b)Rs. 6,000 and Rs. 3,000c)Nild)None of the aboveCorrect answer is option 'A'. Can you explain this answer?
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P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash will P & Q withdraw from the firm on account of goodwill?a)Rs. 3,000 and Rs. 1,500b)Rs. 6,000 and Rs. 3,000c)Nild)None of the aboveCorrect answer is option 'A'. Can you explain this answer? for CA Foundation 2024 is part of CA Foundation preparation. The Question and answers have been prepared according to the CA Foundation exam syllabus. Information about P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash will P & Q withdraw from the firm on account of goodwill?a)Rs. 3,000 and Rs. 1,500b)Rs. 6,000 and Rs. 3,000c)Nild)None of the aboveCorrect answer is option 'A'. Can you explain this answer? covers all topics & solutions for CA Foundation 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for P and Q are partners sharing Profits in the ratio of 2:1. R is admitted to the partnership with effect from 1st April on the term that he will bring Rs. 20,000 as his capital for 1/4th share and pays Rs. 9,000 for goodwill, half of which is to be withdrawn by P and Q. How much cash will P & Q withdraw from the firm on account of goodwill?a)Rs. 3,000 and Rs. 1,500b)Rs. 6,000 and Rs. 3,000c)Nild)None of the aboveCorrect answer is option 'A'. Can you explain this answer?.
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