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Ram sham and mohan were partner in a firm sharing profit ratio 5:3:2 from 1 April 2013 they decided profit sharing ratio equally. the goodwill firm 2,40,000 and divide the goodwill all partners?
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Ram sham and mohan were partner in a firm sharing profit ratio 5:3:2 f...
Introduction
When partners in a firm change their profit-sharing ratio, it often involves the re-evaluation and distribution of goodwill. In this case, Ram, Sham, and Mohan, who initially shared profits in the ratio of 5:3:2, decided to change their ratio to equal shares. The firm's goodwill is valued at 2,40,000.
Goodwill Valuation
- The total goodwill of the firm is 2,40,000.
- Since the partners are changing their profit-sharing ratio, they must account for this goodwill.
Old Profit Sharing Ratio
- Ram: 5 parts
- Sham: 3 parts
- Mohan: 2 parts
New Profit Sharing Ratio
- Ram: 1/3
- Sham: 1/3
- Mohan: 1/3
Calculation of Goodwill Distribution
1. Calculate the total shares in the old ratio:
- Total parts = 5 + 3 + 2 = 10 parts
2. Calculate the share of goodwill for each partner in the old ratio:
- Ram's share of goodwill = (5/10) * 2,40,000 = 1,20,000
- Sham's share of goodwill = (3/10) * 2,40,000 = 72,000
- Mohan's share of goodwill = (2/10) * 2,40,000 = 48,000
3. Calculate the adjustment needed due to the new ratio:
- Each partner will now have a share of goodwill = 2,40,000 / 3 = 80,000
Adjustment Entries
- Ram must pay Sham and Mohan:
- To Sham: 80,000 - 72,000 = 8,000
- To Mohan: 80,000 - 48,000 = 32,000
- Sham and Mohan will receive their respective amounts to adjust to the new ratio.
Conclusion
The adjustment of goodwill ensures that partners fairly compensate one another for the change in profit-sharing arrangement, maintaining equity and harmony within the partnership.
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Following is the Balance Sheet of kusum, ghusum and dishum who have agreed to share profits and losses in proportion of their capitals.(8) On 31st March, 2014, Kusum desired to retire from the firm and the remaining partners decided to carry on the business. It was agreed to revalue the assets and reassess the liabilities on that date, on the following basis:(i) Land and Building to be appreciated by 30%.(ii) Machinery be depreciated by 30%.(iii) There were Bad Debts of Rs. 35,000.(iv) The claim on account of Workmen Compensation Reserve was estimated at Rs. 15,000.(v) Goodwill of the firm was valued at Rs. 2,80,000(vi) remaining partners decided to pay off cash immediately to the Retiring partners by bringing in cash in the new profit sharing ratio and also to leave a balance of Rs1,00,000 in their bank account.(vii) they will also adjust their capitals in their new ratio which was 3:4 Prepare Revaluation Account & Capital Accounts of Partners only?

A, B and C are partners sharing profits and losses in the ratio of 2 : 1 : 1 respectively.On 31st March, 2012, their balance sheet was as follows:A died on 1st April, 2012. The firm had taken a joint life policy for Rs 1,20,000, the payment for which was received by the firm. According to the partnership deed, on retirement or death of a partner, the goodwill of the firm was to be valued at 1½ times of the average profit for the last four years.The profits for the last four years were Rs 64,000, Rs 69,000, Rs 72,000 and Rs 75,000 respectively. For paying the amount due to A’s legal representative, B and C brought as much cash as would bring their capitals in profit sharing ratio and the firm would have a cash balance of Rs 3,000.Pass journal entries to record the above mentioned transactions and prepare partners’ capital accounts.?

A, B and C are partners sharing profits and losses in the ratio of 2 : 1 : 1 respectively.On 31st March, 2012, their balance sheet was as follows:A died on 1st April, 2012. The firm had taken a joint life policy for Rs 1,20,000, the payment for which was received by the firm. According to the partnership deed, on retirement or death of a partner, the goodwill of the firm was to be valued at 1½ times of the average profit for the last four years.The profits for the last four years were Rs 64,000, Rs 69,000, Rs 72,000 and Rs 75,000 respectively. For paying the amount due to A’s legal representative, B and C brought as much cash as would bring their capitals in profit sharing ratio and the firm would have a cash balance of Rs 3,000.Pass journal entries to record the above mentioned transactions and prepare partners’ capital accounts. in this question how b capital become 88750 and c capital will become 68750?

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Ram sham and mohan were partner in a firm sharing profit ratio 5:3:2 from 1 April 2013 they decided profit sharing ratio equally. the goodwill firm 2,40,000 and divide the goodwill all partners?
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