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A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.
- a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000
- b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.
- c)Both
- d)None
Correct answer is option 'B'. Can you explain this answer?
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A and B are partners sharing the profit in the ratio of 3:2. They take...
Treatment of C's contribution in the books of the firm:
1. Calculation of new capital of partners:
- A's capital = (3/5)*(25000+10000) = Rs. 18,000
- B's capital = (2/5)*(25000+10000) = Rs. 12,000
- C's capital = Rs. 30,000
2. Calculation of new profit sharing ratio:
- A:B:C = 1:1:1
3. Calculation of new share of profit:
- Total profit = Old profit + Goodwill
- Goodwill = C's goodwill contribution - Actual goodwill = Rs. 10,000 - Rs. 5,000 = Rs. 5,000
- New profit = Rs. 5,000
- A's share = Rs. 5,000*(1/3) = Rs. 1,667
- B's share = Rs. 5,000*(1/3) = Rs. 1,667
- C's share = Rs. 5,000*(1/3) = Rs. 1,667
4. Adjustment of goodwill:
- As per the new profit sharing ratio, A and B will have to sacrifice their share of profit in the ratio of 3:2.
- Sacrifice of A = Rs. 1,667*(3/5) = Rs. 1,000
- Sacrifice of B = Rs. 1,667*(2/5) = Rs. 667
- Total sacrifice = Rs. 1,667
- As the actual goodwill is only Rs. 5,000, the remaining Rs. 3,333 (Rs. 5,000 - Rs. 1,667) cannot be adjusted.
- Therefore, the unadjusted goodwill will be written off to the old partners' capital accounts in the sacrificing ratio.
- A's share of unadjusted goodwill = Rs. 3,333*(3/5) = Rs. 2,000
- B's share of unadjusted goodwill = Rs. 3,333*(2/5) = Rs. 1,333
- A's new capital = Rs. 18,000 + Rs. 2,000 - Rs. 1,000 = Rs. 19,000
- B's new capital = Rs. 12,000 + Rs. 1,333 - Rs. 667 = Rs. 12,666
1. Calculation of new capital of partners:
- A's capital = (3/5)*(25000+10000) = Rs. 18,000
- B's capital = (2/5)*(25000+10000) = Rs. 12,000
- C's capital = Rs. 30,000
2. Calculation of new profit sharing ratio:
- A:B:C = 1:1:1
3. Calculation of new share of profit:
- Total profit = Old profit + Goodwill
- Goodwill = C's goodwill contribution - Actual goodwill = Rs. 10,000 - Rs. 5,000 = Rs. 5,000
- New profit = Rs. 5,000
- A's share = Rs. 5,000*(1/3) = Rs. 1,667
- B's share = Rs. 5,000*(1/3) = Rs. 1,667
- C's share = Rs. 5,000*(1/3) = Rs. 1,667
4. Adjustment of goodwill:
- As per the new profit sharing ratio, A and B will have to sacrifice their share of profit in the ratio of 3:2.
- Sacrifice of A = Rs. 1,667*(3/5) = Rs. 1,000
- Sacrifice of B = Rs. 1,667*(2/5) = Rs. 667
- Total sacrifice = Rs. 1,667
- As the actual goodwill is only Rs. 5,000, the remaining Rs. 3,333 (Rs. 5,000 - Rs. 1,667) cannot be adjusted.
- Therefore, the unadjusted goodwill will be written off to the old partners' capital accounts in the sacrificing ratio.
- A's share of unadjusted goodwill = Rs. 3,333*(3/5) = Rs. 2,000
- B's share of unadjusted goodwill = Rs. 3,333*(2/5) = Rs. 1,333
- A's new capital = Rs. 18,000 + Rs. 2,000 - Rs. 1,000 = Rs. 19,000
- B's new capital = Rs. 12,000 + Rs. 1,333 - Rs. 667 = Rs. 12,666
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A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. Can you explain this answer?
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A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. 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 A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. 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 A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. Can you explain this answer?.
A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. 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 A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. 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 A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. Can you explain this answer?.
Solutions for A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. Can you explain this answer?, a detailed solution for A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. Can you explain this answer? has been provided alongside types of A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. Can you explain this answer? theory, EduRev gives you an
ample number of questions to practice A and B are partners sharing the profit in the ratio of 3:2. They take C as the new partner, who is supposed to bring Rs. 25,000 against capital and Rs. 10,000 against goodwill. New profit sharing ratio is 1:1:1. C is able to bring Rs. 30,000 only. How this will be treated in the books of the firm.a)A and B will share goodwill brought by C as Rs. 4,000: Rs.1,000b)Goodwill not brought, will be adjusted to the extent of Rs.5,000 in sacrificing ratio.c)Bothd)NoneCorrect answer is option 'B'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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