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Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustment
- a)Ram Rs.3,000
- b)Rohit Rs.3,000
- c)Rohit Rs.30,000
- d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 each
Correct answer is option 'B'. Can you explain this answer?
Verified Answer
Ram and Rohit shared profit and loss in the ratio of 3:2. With effect ...
Adjustment of goodwill amount at the time of change in profit sharing ratio:
Old Ratio = 3:2
New Ratio = 1:1
Ram’s Sacrifice = 3/5 – 1/2 = 1/15
Rohit’s Gain = 2/5 – 1/2 = 1/15
Rohit’s Gain of goodwill amount = 30,000 × 1/10 = 3,000
Old Ratio = 3:2
New Ratio = 1:1
Ram’s Sacrifice = 3/5 – 1/2 = 1/15
Rohit’s Gain = 2/5 – 1/2 = 1/15
Rohit’s Gain of goodwill amount = 30,000 × 1/10 = 3,000
Most Upvoted Answer
Ram and Rohit shared profit and loss in the ratio of 3:2. With effect ...
Since Rohit is a gaining partner, (-1/10) and entry for goodwill adjustment is gainer's capital a/c to sacrificer's capital a/c ( gainer is debited) so rohit will be debited by his share of goodwill i.e (30000*1/10)=3000
Therefore option (b) is correct
Therefore option (b) is correct
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Ram and Rohit shared profit and loss in the ratio of 3:2. With effect ...
Explanation:
To determine which partner's account should be debited for the adjustment, we need to understand the concept of goodwill and how it is treated in partnerships.
Goodwill is an intangible asset that represents the reputation and customer base of a business. When there is a change in the profit-sharing ratio or admission of a new partner, the value of goodwill needs to be adjusted.
In this case, Ram and Rohit initially shared profit and loss in the ratio of 3:2. However, from 01/04/2012, they agreed to share profits equally. This change in profit-sharing ratio implies a change in their ownership and the value of goodwill.
Steps to Determine which Partner's Account should be Debited:
1. Calculate the total value of goodwill: The goodwill of the firm is valued at 30000.
2. Determine the change in profit-sharing ratio: Initially, Ram and Rohit shared profits in the ratio of 3:2. But now, they agreed to share profits equally, i.e., in the ratio of 1:1.
3. Determine the change in ownership: The change in profit-sharing ratio indicates a change in ownership. Since they agreed to share profits equally, it means that they now have an equal ownership stake in the firm.
4. Determine the impact on each partner's capital account: When there is a change in ownership, the value of goodwill needs to be adjusted in the partners' capital accounts. This adjustment is made by debiting or crediting the respective partner's capital account.
In this case, since Ram and Rohit now have equal ownership, the adjustment needs to be made by debiting one partner's capital account and crediting the other partner's capital account.
5. Determine which partner's account should be debited: Since Ram and Rohit initially had a profit-sharing ratio of 3:2, and Rohit's share decreased to equalize the profit-sharing ratio, Rohit's capital account should be debited for the adjustment. This means that Rohit's capital account should be reduced by the value of goodwill, i.e., Rs. 30000.
Therefore, the correct answer is option 'B': Rohit's capital account should be debited with Rs. 30000 for the goodwill adjustment.
To determine which partner's account should be debited for the adjustment, we need to understand the concept of goodwill and how it is treated in partnerships.
Goodwill is an intangible asset that represents the reputation and customer base of a business. When there is a change in the profit-sharing ratio or admission of a new partner, the value of goodwill needs to be adjusted.
In this case, Ram and Rohit initially shared profit and loss in the ratio of 3:2. However, from 01/04/2012, they agreed to share profits equally. This change in profit-sharing ratio implies a change in their ownership and the value of goodwill.
Steps to Determine which Partner's Account should be Debited:
1. Calculate the total value of goodwill: The goodwill of the firm is valued at 30000.
2. Determine the change in profit-sharing ratio: Initially, Ram and Rohit shared profits in the ratio of 3:2. But now, they agreed to share profits equally, i.e., in the ratio of 1:1.
3. Determine the change in ownership: The change in profit-sharing ratio indicates a change in ownership. Since they agreed to share profits equally, it means that they now have an equal ownership stake in the firm.
4. Determine the impact on each partner's capital account: When there is a change in ownership, the value of goodwill needs to be adjusted in the partners' capital accounts. This adjustment is made by debiting or crediting the respective partner's capital account.
In this case, since Ram and Rohit now have equal ownership, the adjustment needs to be made by debiting one partner's capital account and crediting the other partner's capital account.
5. Determine which partner's account should be debited: Since Ram and Rohit initially had a profit-sharing ratio of 3:2, and Rohit's share decreased to equalize the profit-sharing ratio, Rohit's capital account should be debited for the adjustment. This means that Rohit's capital account should be reduced by the value of goodwill, i.e., Rs. 30000.
Therefore, the correct answer is option 'B': Rohit's capital account should be debited with Rs. 30000 for the goodwill adjustment.
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Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustmenta)Ram Rs.3,000b)Rohit Rs.3,000c)Rohit Rs.30,000d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 eachCorrect answer is option 'B'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustmenta)Ram Rs.3,000b)Rohit Rs.3,000c)Rohit Rs.30,000d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 eachCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustmenta)Ram Rs.3,000b)Rohit Rs.3,000c)Rohit Rs.30,000d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 eachCorrect answer is option 'B'. Can you explain this answer?.
Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustmenta)Ram Rs.3,000b)Rohit Rs.3,000c)Rohit Rs.30,000d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 eachCorrect answer is option 'B'. Can you explain this answer? for Commerce 2025 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustmenta)Ram Rs.3,000b)Rohit Rs.3,000c)Rohit Rs.30,000d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 eachCorrect answer is option 'B'. Can you explain this answer? covers all topics & solutions for Commerce 2025 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustmenta)Ram Rs.3,000b)Rohit Rs.3,000c)Rohit Rs.30,000d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 eachCorrect answer is option 'B'. Can you explain this answer?.
Solutions for Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustmenta)Ram Rs.3,000b)Rohit Rs.3,000c)Rohit Rs.30,000d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 eachCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for Commerce.
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ample number of questions to practice Ram and Rohit shared profit and loss in the ratio of 3:2. With effect from 01/04/2012 they agreed to share profits equally. The goodwill of the firm was valued at 30000. Which partner account should be debited in this case for the adjustmenta)Ram Rs.3,000b)Rohit Rs.3,000c)Rohit Rs.30,000d)Both Rohit Rs.3,000 and Ram Rs.3,000 1,500 eachCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice Commerce tests.
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