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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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.
- a)Cash bought in by C will only be credited to his capital account.
- b)Goodwill will be raised to full value in old ratio.
- c)Goodwill will be raised to full value in new ratio.
- d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.
Correct answer is option 'A'. 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 capital and goodwill contribution in the books of the firm
Capital Contribution
- C brought Rs. 25,000 against capital.
- The cash brought in by C will only be credited to his capital account.
- Therefore, the entry will be:
- C's Capital A/c Dr. 25,000
- To Cash A/c 25,000
Goodwill Contribution
- C brought Rs. 10,000 against goodwill.
- As per the new profit sharing ratio of 1:1:1, the sacrificing ratio of A and B will be 3:2.
- Therefore, the amount of goodwill to be sacrificed by A and B will be in the ratio of 3:2.
- The total amount of goodwill will be raised to its full value in the old ratio of 3:2.
- However, C's goodwill contribution will not be credited to the goodwill account of the firm.
- Instead, C will compensate A and B outside the firm for their sacrifice.
- Therefore, the entry to record C's goodwill contribution will be:
- C's Capital A/c Dr. 10,000
- To A's Capital A/c 7,500 (3/5 of 10,000)
- To B's Capital A/c 5,000 (2/5 of 10,000)
Conclusion
- C's capital contribution will be credited to his capital account only.
- C's goodwill contribution will not be credited to the goodwill account of the firm.
- A and B's sacrifice of goodwill will be debited to their respective capital accounts in the sacrificing ratio of 3:2.
Capital Contribution
- C brought Rs. 25,000 against capital.
- The cash brought in by C will only be credited to his capital account.
- Therefore, the entry will be:
- C's Capital A/c Dr. 25,000
- To Cash A/c 25,000
Goodwill Contribution
- C brought Rs. 10,000 against goodwill.
- As per the new profit sharing ratio of 1:1:1, the sacrificing ratio of A and B will be 3:2.
- Therefore, the amount of goodwill to be sacrificed by A and B will be in the ratio of 3:2.
- The total amount of goodwill will be raised to its full value in the old ratio of 3:2.
- However, C's goodwill contribution will not be credited to the goodwill account of the firm.
- Instead, C will compensate A and B outside the firm for their sacrifice.
- Therefore, the entry to record C's goodwill contribution will be:
- C's Capital A/c Dr. 10,000
- To A's Capital A/c 7,500 (3/5 of 10,000)
- To B's Capital A/c 5,000 (2/5 of 10,000)
Conclusion
- C's capital contribution will be credited to his capital account only.
- C's goodwill contribution will not be credited to the goodwill account of the firm.
- A and B's sacrifice of goodwill will be debited to their respective capital accounts in the sacrificing ratio of 3:2.
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A and B are partners sharing the profit in the ratio of 3:2. They take...
As he is investing capital in the firm. The entry will be Cash A/c...... Dr. To capital A/c. So it is credited in his acc
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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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct 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 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct 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 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct 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 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct 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 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. Can you explain this answer? in English & in Hindi are available as part of our courses for CA Foundation.
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Here you can find the meaning 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. Can you explain this answer? defined & explained in the simplest way possible. Besides giving the explanation 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. 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 bought cash for his share of Capital and agreed to compensate to A and B outside the firm. How this will be treated in the books of the firm.a)Cash bought in by C will only be credited to his capital account.b)Goodwill will be raised to full value in old ratio.c)Goodwill will be raised to full value in new ratio.d)Cash bought by C will be credited to his account and debited with his share of goodwill, which will be debited to A and B’s account in sacrificing ratio.Correct answer is option 'A'. Can you explain this answer? tests, examples and also practice CA Foundation tests.
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