Partnership Accounts

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| By Sweetsalman123

Sweetsalman123

Community Contributor

Quizzes Created: 48 | Total Attempts: 90,250

Questions: 163 | Attempts: 1,305 | Updated: Aug 24, 2023

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Questions and Answers

1.

(i) Actual average profit Rs. 72,000 (ii) Normal rate of return 10% (iii) Assets Rs. 9,70,000 (iv) Current Liabilities Rs. 4,00,000 Goodwill according to capitalization method will be
- A.
  
  Rs.1,50,000
- B.
  
  Rs.1,40,000
- C.
  
  Rs.1,60,000
- D.
  
  None'of the three
Correct Answer
A. Rs.1,50,000

Explanation
Goodwill according to the capitalization method is calculated by subtracting the normal rate of return from the actual average profit and then dividing it by the normal rate of return. In this case, the normal rate of return is 10% and the actual average profit is Rs. 72,000. Using the formula (Actual average profit - Normal rate of return) / Normal rate of return, we get (72000 - 10% of 72000) / 10% = Rs. 1,50,000. Therefore, the correct answer is Rs. 1,50,000.

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2
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2.

A & B are equal partners with capitals of the Rs. 10,000 and Rs. 8,000 respectively. They admit C as a partner with 1/4th share in the profits of the firm. C brings Rs. 8,000 as his share of capital. Value of goodwill will be :
- A.
  
  Rs.6000
- B.
  
  Rs.5000
- C.
  
  Rs.8000
- D.
  
  None of the above
Correct Answer
A. Rs.6000

Explanation
When a new partner is admitted to a partnership, the value of goodwill is usually calculated based on the new partner's capital contribution. In this case, C brings Rs. 8,000 as his share of capital. Since C is given 1/4th share in the profits, it can be assumed that the total capital of the firm is Rs. 32,000 (8,000 divided by 1/4). The value of goodwill can be calculated by subtracting the total capital from the total value of the firm. Therefore, the value of goodwill in this case would be Rs. 32,000 - Rs. 26,000 (10,000 + 8,000) = Rs. 6,000.

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3.

A & B are partners sharing profits and losses in the ratio 5:3. On admission, C brings Rs. 70,000 cash and Rs. 48,000 against goodwill. New profit sharing ratio between A, B and C are 7:5:4. The scarificing ratio among A:B will be
- A.
  
  3:1
- B.
  
  4:7
- C.
  
  5:4.
- D.
  
  2:1.
Correct Answer
A. 3:1

Explanation
The sacrificing ratio is used to determine the change in profit sharing ratio between the existing partners when a new partner is admitted. In this scenario, A and B are the existing partners and C is the new partner. The new profit sharing ratio between A, B, and C is given as 7:5:4. To find the sacrificing ratio between A and B, we need to compare their old ratio (5:3) with the new ratio (7:5). By comparing the two ratios, we can see that A sacrifices 2 units of his share in favor of C, while B sacrifices 1 unit of his share in favor of C. Therefore, the sacrificing ratio between A and B is 2:1.

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4.

A and B are equal partners in a firm their capital shows credit balance of Rs. 18,000 and Rs.12,000 respectively. A new partner C is admitted with 1/5th share in profits. He brings Rs. 14,000 for his capital. Value of hidden goodwill at the time of C's admission will be
- A.
  
  Rs. 26000
- B.
  
  Rs. 25000
- C.
  
  Rs. 20000
- D.
  
  None of the three
Correct Answer
A. Rs. 26000

Explanation
The value of hidden goodwill at the time of C's admission can be calculated by using the formula:
Hidden Goodwill = (New Partner's Capital - Proportionate Share of Total Capital) / (New Partner's Share in Profits)

In this case, A's capital is Rs. 18,000 and B's capital is Rs. 12,000. The total capital is Rs. 30,000. C brings Rs. 14,000 for his capital and his share in profits is 1/5th. Therefore, his proportionate share of the total capital is (1/5) * Rs. 30,000 = Rs. 6,000.

Using the formula, the hidden goodwill is (Rs. 14,000 - Rs. 6,000) / (1/5) = Rs. 8,000 * 5 = Rs. 40,000.

However, since the question asks for the value of hidden goodwill, we need to subtract the capital brought by C. Therefore, the value of hidden goodwill is Rs. 40,000 - Rs. 14,000 = Rs. 26,000.

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5.

A and B are partneers in a firm sharing profits and losses in the ratio of 3:2 .A new partner C is admitted A surrenders 1/5 th share of his profit in favour of C and B surrenders 2/5 th share of his profit in favour of C.New profit sharing ratio will be
- A.
  
  12:6:7
- B.
  
  12:5:6
- C.
  
  12:4:5
- D.
  
  None of the three
Correct Answer
A. 12:6:7

Explanation
After the admission of partner C, A surrenders 1/5 of his share and B surrenders 2/5 of his share in favor of C. This means that C will receive 1/5 of A's original share and 2/5 of B's original share. The new profit sharing ratio will be 3/5 for A, 3/5 for B, and 6/5 for C. Simplifying the ratios, we get 12:6:7. Therefore, the correct answer is 12:6:7.

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6.

A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C as the new partner for 1/6th share in the profits. The firm goodwill was valued at Rs.1,50,000/-. For adjustment of goodwill, C's account will be debited by
- A.
  
  Rs.20,000
- B.
  
  Rs. 15.000
- C.
  
  Rs.25,000
- D.
  
  None of the three
Correct Answer
C. Rs.25,000

Explanation
When a new partner is admitted into a firm, the existing partners need to adjust the value of the firm's goodwill. In this case, A and B are sharing profits in the ratio of 3:2, and they admit C for a 1/6th share in the profits. This means that C will receive 1/6th of the firm's goodwill value. Since the firm's goodwill is valued at Rs.1,50,000, C's share of the goodwill will be Rs.25,000 (1/6 x Rs.1,50,000 = Rs.25,000). Therefore, C's account will be debited by Rs.25,000 for the adjustment of goodwill.

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7.

A and B are partners in a firm. During the year 2006, A Withdrew Rs.1,000 p.m. and B withdraw Rs.500 p.m. on the first day of each month for personal use. Interest on drawings is to be charged @ 10% p.a. The interest on drawings will be
- A.
  
  Rs.650
- B.
  
  Rs.975
- C.
  
  Rs.900
- D.
  
  Rs. 1,800
Correct Answer
B. Rs.975

Explanation
During the year 2006, A withdrew Rs.1,000 per month and B withdrew Rs.500 per month for personal use. The total amount of money withdrawn by A and B in a year is (Rs.1,000 x 12) + (Rs.500 x 12) = Rs.12,000 + Rs.6,000 = Rs.18,000.
The interest on drawings is charged at a rate of 10% per annum. So, the interest on the total amount withdrawn will be (Rs.18,000 x 10%) = Rs.1,800.
However, since the interest is charged on a monthly basis, the interest for a year will be (Rs.1,800 / 12) = Rs.150 per month.
Therefore, the correct answer is Rs.975, which is the interest on the total amount withdrawn by A and B in a year.

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8.

A and B are partners sharing in the ratio of 3:2. C is admitted for 1/5th share and brings Rs. 15,000 as capital and necessary amount for his share of goodwill. The goodwill of the entire firm is valued Rs. at 60,000. Goodwill brought by C will be
- A.
  
  Rs.12,000
- B.
  
  Rs.10,000
- C.
  
  Rs.15,000
- D.
  
  None of the three
Correct Answer
A. Rs.12,000

Explanation
C is admitted for 1/5th share, which means that the total share of A, B, and C combined is divided into 5 equal parts. A and B's share ratio is 3:2, which means they have a total of 5 parts. So, C's share is equal to 1 part.

The total value of the goodwill is Rs. 60,000. Since C is bringing the necessary amount for his share of goodwill, we need to find out the value of 1 part of the goodwill.

1 part of the goodwill = Rs. 60,000 / 5 = Rs. 12,000.

Therefore, the goodwill brought by C is Rs. 12,000.

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9.

A and B are partners in a firm sharing profits and losses in the ratio of 3:2. They have invested capitals of Rs.40,000 and Rs.25,000 respectively. As per the partnership deed, they are entitled to interest on capital @ 5% p.a. before dividing the profits. During the year, the firm earned a profit of Rs.3,900 before allowing interest. The net profits will be apportioned as
- A.
  
  Rs.260 to A and Rs.390 to B
- B.
  
  Rs.390 to A and Rs.260 to B
- C.
  
  Rs.2,340 to A and Rs.1,560 to B
- D.
  
  Rs.1,560 to A and Rs.2,340 to B
Correct Answer
B. Rs.390 to A and Rs.260 to B

Explanation
The net profits will be apportioned in the ratio of 3:2, as per the partnership agreement. This means that for every 3 parts of profit, A will receive 2 parts and B will receive 3 parts. Since the total profit is Rs.3,900, we can calculate the amounts as follows: (3/5) * 3900 = Rs.2,340 for A and (2/5) * 3900 = Rs.1,560 for B. Therefore, the correct answer is Rs.390 to A and Rs.260 to B.

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10.

A and B are partners sharing profits and losses in the ratio of 3:2 having the capital of Rs. 80,000 and Rs. 50,000 respectively. They are entitled to 9% p.a. interest on capital before distributing the profits. During the year firm earned Rs. 7,800 after allowing interest on capital. Profits apportioned among A and B is
- A.
  
  4,680 and 3,120
- B.
  
  4,800 and 3,000
- C.
  
  5,000 and 2,800
- D.
  
  None of the above
Correct Answer
A. 4,680 and 3,120

Explanation
The total capital of A and B is Rs. 80,000 + Rs. 50,000 = Rs. 1,30,000. They are entitled to 9% interest on capital, which is (9/100) * Rs. 1,30,000 = Rs. 11,700. After deducting the interest on capital from the total profit of Rs. 7,800, we get Rs. 7,800 - Rs. 11,700 = -Rs. 3,900. Since the profit is negative, it means there is a loss. The loss is to be shared in the ratio of their capital, which is 3:2. Therefore, the loss apportioned among A and B is (3/5) * Rs. 3,900 = Rs. 2,340 for A and (2/5) * Rs. 3,900 = Rs. 1,560 for B. To find the profits, we subtract the loss from the interest on capital. Therefore, the profits apportioned among A and B is (Rs. 11,700 - Rs. 2,340) = Rs. 9,360 for A and (Rs. 11,700 - Rs. 1,560) = Rs. 10,140 for B.

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11.

A and B are partners sharing profits and losses in the ratio of 3:2 (A's Capital is Rs. 30,000 and B's Capital is Rs. 15,000). They admitted C agreed to give 1/5th share of profits to him. How much C should bring in towards his capital?
- A.
  
  Rs.9,000
- B.
  
  Rs.12,000
- C.
  
  Rs.14,500
- D.
  
  Rs.11,250
Correct Answer
D. Rs.11,250

Explanation
C should bring in Rs.11,250 towards his capital. This can be calculated by finding 1/5th of the total profit share, which is (3/5) * (1/5) = 3/25. The total profit share is the sum of A and B's capital, which is Rs.30,000 + Rs.15,000 = Rs.45,000. Therefore, 3/25 * Rs.45,000 = Rs.5,400. Since C is entitled to 1/5th of the profit share, he should bring in Rs.5,400 * 5 = Rs.27,000 towards his capital.

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12.

A and B are partners sharing profits in the ratio of 3:2 They admit C as a new partner for 3/10th share, which he acquires 2/10 from A and 1/10 from B. The new profit sharing ratio of A, B and C is
- A.
  
  3:4:3
- B.
  
  4:3:3
- C.
  
  3:3:4
- D.
  
  None of the three
Correct Answer
B. 4:3:3

Explanation
After admitting C as a partner, the new profit sharing ratio will be calculated by adding the shares acquired by C to the original ratios of A and B. C acquires 2/10 from A and 1/10 from B, which means C's share is 3/10. The new ratio will be 3:2 + 2/10:3 + 1/10, which simplifies to 3:4:3. Therefore, the correct answer is 3:4:3.

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13.

A and B are partners sharing profits in the ratio of 3:2 with capitals of Rs. 50,000 and Rs. 30,000 respectively. Interest on capital is agreed @ 6% p a. B is to be allowed an annual salary of Rs. 2,500 during 2000, the profits of the year prior to calculation of interest on capital but after charging B's salary amounted to Rs. 12,500. Manager is to be allowed a Commission of 5% of profits remaining after deducting salary and interest on capital but before charging such Commission, Profit transferred to partners Capital Accounts will be
- A.
  
  A Rs. 4389 B Rs. 2926
- B.
  
  A Rs. 4000 B Rs. 3315
- C.
  
  A Rs. 3000 B Rs. 4315
- D.
  
  A Rs. 2500 B Rs. 4815
Correct Answer
A. A Rs. 4389 B Rs. 2926

Explanation
Based on the given information, the profits of the year after deducting B's salary amounted to Rs. 12,500. From this amount, the interest on capital needs to be deducted. The interest on A's capital of Rs. 50,000 at 6% is Rs. 3,000, and the interest on B's capital of Rs. 30,000 at 6% is Rs. 1,800. Therefore, the remaining profits after deducting salary and interest on capital is Rs. 7,700. The manager's commission is 5% of this amount, which is Rs. 385. Finally, the remaining profits after deducting salary, interest on capital, and manager's commission is Rs. 7,315, which will be transferred to the partners' capital accounts in the ratio of 3:2. Thus, A will receive Rs. 4,389 and B will receive Rs. 2,926.

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14.

A and B are partners sharing profits in the ratio of 3:2. C is admitted as a partner. The new profit sharing ratio among A, B and C is 5:3:2. Sacrificing ratio will be
- A.
  
  1:1
- B.
  
  3:2
- C.
  
  2:3
- D.
  
  None of the above
Correct Answer
A. 1:1

Explanation
The sacrificing ratio is the ratio in which the existing partners give up their share of profits in order to make room for the new partner. In this case, A and B are the existing partners and C is the new partner. The new profit sharing ratio is 5:3:2, which means that A will receive 5 parts, B will receive 3 parts, and C will receive 2 parts of the profits. Since the existing ratio of A and B is 3:2, they will have to sacrifice an equal amount of their share to make the new ratio possible. Therefore, the sacrificing ratio will be 1:1.

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15.

A and B are partners with capitals of Rs. 10,000 and Rs. 20,000 respectively and sharing profits equally. They admitted C as their third partner with one-fourth profits of the firm on the payment of Rs. 12,000. The amount of hidden goodwill is:
- A.
  
  6,000
- B.
  
  10,000
- C.
  
  8,000
- D.
  
  None of the above
Correct Answer
A. 6,000

Explanation
When C is admitted as a partner, they pay Rs. 12,000 to acquire one-fourth of the profits of the firm. This implies that the total profits of the firm are four times the payment made by C, which is Rs. 48,000. Since A and B share the remaining three-fourths of the profits equally, their share is Rs. 36,000. The difference between their capital and their share of profits (10,000 - 36,000) is the hidden goodwill, which is Rs. 6,000. Therefore, the correct answer is 6,000.

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16.

A and B are partners with the capital Rs. 50,000 and Rs. 40,000 respectively. They share profits and losses equally. C is admitted on bringing Rs. 50,000 as capital only and nothing was bought against goodwill.Goodwill in balance sheet of Rs.20,000 is revalued as Rs.35,000.What will be value of goodwill in the books after the admission of C ?
- A.
  
  Rs.55,000
- B.
  
  Rs.35,000
- C.
  
  Rs.20,000
- D.
  
  Rs.15,000
Correct Answer
B. Rs.35,000

Explanation
The value of goodwill in the balance sheet before the admission of C was Rs.20,000. After the admission of C, the goodwill is revalued at Rs.35,000. Therefore, the value of goodwill in the books after the admission of C is Rs.35,000.

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17.

A and B are partners, sharing profits in the ratio 5:3. They admit C with 1/5 share in profits, which he acquires equally from both i.e. 1/10 from A and 1/10 from B. Now profit sharing ratio will be
- A.
  
  21:11:8
- B.
  
  11:21:8
- C.
  
  8:11:21
- D.
  
  None of the three
Correct Answer
A. 21:11:8

Explanation
When C is admitted as a partner, his share in the profits is 1/5, which he acquires equally from both A and B. This means that C will receive 1/10 of the profits from A and 1/10 of the profits from B.

Since A and B were previously sharing profits in the ratio 5:3, their new profit sharing ratio will be adjusted to accommodate C's share.

To find the new ratio, we add C's share to A and B's previous shares.

The new profit sharing ratio will be 5 + 1/10 : 3 + 1/10 : 1/5, which simplifies to 51:31:20.

Therefore, the correct answer is 21:11:8.

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18.

A and B are partners, sharing profits in the ratio of 5:3. They admit C with 1/5 share in profits, which he acquires equally from both 1/10 from A and 1/10 from B. New profit sharing ratio will be
- A.
  
  21:11:8
- B.
  
  20:10:4
- C.
  
  15:10:5
- D.
  
  None of the three
Correct Answer
A. 21:11:8

Explanation
When C is admitted with a 1/5 share in profits, it means that C will receive 1/5 of the total profit. C acquires this share equally from both A and B, which means C will receive 1/10 of the total profit from A and 1/10 from B.

Since A and B were sharing profits in the ratio of 5:3, the total profit can be divided into 8 parts (5 parts for A and 3 parts for B).

C will receive 1/10 of the total profit from A, which is 1/10 * 5/8 = 1/16 of the total profit.
C will also receive 1/10 of the total profit from B, which is 1/10 * 3/8 = 3/80 of the total profit.

Therefore, the new profit sharing ratio will be 5:3 - 1/16:3/80, which simplifies to 21:11:8.

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19.

A and B are partners. A's capital is Rs. 10,000 and B's capital is Rs. 6,000 Interest is payable @ 6% P.A. B is entitled to a salary of Rs.300 per month. Profit for the current year before interest and salary to B is Rs. 8,000. Profit between A and B will be divided
- A.
  
  A RS.1720,B RS.1720
- B.
  
  A RS.2000,B RS.1440
- C.
  
  A RS.1440,B RS.2000
- D.
  
  None of the above
Correct Answer
A. A RS.1720,B RS.1720

Explanation
The profit will be divided based on the ratio of their capital and the remaining profit after deducting B's salary. A's capital ratio is 10,000/16,000 and B's capital ratio is 6,000/16,000. The remaining profit after deducting B's salary is 8,000 - (12*300) = 4,400. Therefore, A's share will be (10,000/16,000) * 4,400 = 2,750 and B's share will be (6,000/16,000) * 4,400 = 1,650. Adding B's salary of 3,600, B's total share will be 1,650 + 3,600 = 5,250. Hence, the profit will be divided as A RS. 2,750 and B RS. 5,250.

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20.

A and D are equal partners. They wanted to admit C as 1/6th partner who brought Rs.60,000 as goodwill. The new profit sharing ratio is 3:2:1. Profit sacrificing ratio will be:
- A.
  
  0:1/6
- B.
  
  2:1
- C.
  
  3:1
- D.
  
  None of the above
Correct Answer
A. 0:1/6

Explanation
When C is admitted as a 1/6th partner, the new profit sharing ratio becomes 3:2:1. This means that A will receive 3 parts of the profit, D will receive 2 parts, and C will receive 1 part. However, since C brought Rs.60,000 as goodwill, it is considered as a sacrifice from C's side. Therefore, the profit sacrificing ratio for C will be 0, while A and D will have a profit sacrificing ratio of 1/6 each. Hence, the correct answer is 0:1/6.

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21.

A andBare partners sharing profits in the ratio of 4:1. A surrenders 1/4th of his share and B surrenders 1/2 of his share in favour of C, a new partner. Sacrificing ratio of A andBwill be
- A.
  
  2:1
- B.
  
  1:2
- C.
  
  1:1
- D.
  
  None'of the three
Correct Answer
A. 2:1

Explanation
A and B are partners sharing profits in the ratio of 4:1. When A surrenders 1/4th of his share and B surrenders 1/2 of his share in favor of C, the new profit sharing ratio will be 3/4 of A's original share and 1/2 of B's original share. Simplifying this, we get the new ratio of A:B:C as 3:1:2. Therefore, the sacrificing ratio of A and B will be 2:1.

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22.

A firm earns profit of Rs.1,10,000. The normal rate of return in a similar type of business is 10%. The value of total assets (excluding goodwill) and total outside liabilities are Rs.11,00,000 and Rs.1,00,000 respectively. The value of goodwill is ( Capitalisation Method )
- A.
  
  Rs.1,00,000
- B.
  
  Rs.10,00,000
- C.
  
  Nil
- D.
  
  None of the above
Correct Answer
A. Rs.1,00,000

Explanation
The value of goodwill can be calculated using the capitalization method, which is the excess of the actual profit over the normal rate of return. In this case, the normal rate of return is 10% of the total assets, which is Rs.11,00,000 x 10% = Rs.1,10,000. Since the firm's actual profit is Rs.1,10,000, there is no excess profit and therefore the value of goodwill is nil. Hence, the correct answer is "Nil".

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23.

A firm had an unrecorded investment of worth Rs.5,000. Entry in the firms journal on admission of a partner will be Options : (A) unrecovered investment A/c Dr .5000 To Revaluation A/c 5000 (B) Revaluation AIc Dr.5000 To unrecorded investment A/ c 5000 (C) partner capital a/c Dr.5000 To unrecorded investment A / c 5000 (D) None of the three.
- A.
  
  A
- B.
  
  B
- C.
  
  C
- D.
  
  D
Correct Answer
A. A

Explanation
The correct answer is A because it correctly records the unrecorded investment in the firm's journal on admission of a partner. The entry debits the Unrecovered Investment account for Rs. 5000 and credits the Revaluation account for the same amount. This entry reflects the increase in the firm's assets due to the partner's admission and the adjustment made to account for the previously unrecorded investment.

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24.

A firm has on average profit of Rs.60,000. Rate of return on capital employed is 12.5% .p.a. Total capital employed in the firm was Rs.4,00,000. Goodwill on the basis of two years purchase of super profits is
- A.
  
  Rs.20,000
- B.
  
  Rs.15,000
- C.
  
  Rs. 10,000
- D.
  
  None of the above
Correct Answer
A. Rs.20,000

Explanation
The rate of return on capital employed is 12.5% p.a., which means that the firm earns a profit of 12.5% of its capital employed annually. The average profit of the firm is Rs.60,000, which is the super profit. To calculate the goodwill based on two years' purchase of super profits, we multiply the super profit by 2. Therefore, the goodwill is Rs.20,000.

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25.

A firm has on average profit of Rs.60,000; rate of return on capital employed is12.5%p.a.; total capital employed in the firm was Rs.4,00,000. Goodwill on the basis of two year's purchase of super profits is
- A.
  
  Rs.15,000
- B.
  
  Rs.10,000
- C.
  
  Rs.20,000
- D.
  
  None of the above
Correct Answer
C. Rs.20,000

Explanation
The rate of return on capital employed is 12.5% per annum, and the average profit of the firm is Rs.60,000. To calculate the goodwill on the basis of two year's purchase of super profits, we need to find the super profits first. Super profits can be calculated by subtracting the normal profit (which is the profit that can be earned at the given rate of return) from the average profit. The normal profit can be calculated by multiplying the capital employed by the rate of return. In this case, the normal profit would be Rs.4,00,000 * 12.5% = Rs.50,000. Therefore, the super profits would be Rs.60,000 - Rs.50,000 = Rs.10,000. The goodwill on the basis of two year's purchase of super profits would be 2 * Rs.10,000 = Rs.20,000.

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26.

A partnership firm earned net profits during the last 3 years as follows - 2001 15,000 2002 20,000 2003 25,000 The capital investment in the firm throughout the above mentioned period has been Rs. 1,00,000. Having regard to the risk involved 15% is B considered to be a fair return on capital. Goodwill on the basis of 2 years purchase of average super earned during the above mentioned 3 years will be
- A.
  
  Rs.8,000
- B.
  
  Rs.10,000
- C.
  
  Rs.12,000
- D.
  
  Rs.15,000
Correct Answer
B. Rs.10,000

Explanation
The average super profit earned by the partnership firm over the last 3 years is (15,000 + 20,000 + 25,000)/3 = 20,000. The fair return on capital is 15% of the capital investment, which is 0.15 x 1,00,000 = 15,000. The goodwill is calculated as 2 years purchase of the average super profit, which is 2 x 20,000 = 40,000. Therefore, the correct answer is Rs.10,000.

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27.

A partnership firm maintains its accounts on calendar year basis. B, one of its partner died on 31st March 2006. The profit for the year 2005 was Rs. 75,000, which was distributed among all the three partners equally. The share of profit of B for the year 2006 on the basis of the year 2005 will be
- A.
  
  Rs.18,750
- B.
  
  Rs.25,000
- C.
  
  Rs.Nil
- D.
  
  Rs.6,250
Correct Answer
D. Rs.6,250

Explanation
The share of profit of partner B for the year 2006 on the basis of the year 2005 will be Rs.6,250. This is because the profit for the year 2005 was Rs.75,000, which was distributed equally among all three partners. Since B is one of the partners, his share of the profit for 2005 would be Rs.75,000 divided by 3, which is Rs.25,000. However, B died on 31st March 2006, so he would only be entitled to a share of the profit for the period from January 1, 2006, to March 31, 2006. This period is 3 months out of the total 12 months in a year, so B's share of the profit for 2006 would be Rs.25,000 divided by 12 and multiplied by 3, which is Rs.6,250.

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28.

A, B & C are equal partners. They wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill Rs. 90,000 but they want to immediately write it off. The effected accounts will be
- A.
  
  C's capital account debit and A's capital account credit with Rs. 10,000.
- B.
  
  B's capital account debit and A's capital account credit with Rs. 10,000
- C.
  
  C's capital account debit and B's capital account credit with Rs. 10,000
- D.
  
  A's capital account debit and C's capital account credit with Rs.10,000
Correct Answer
D. A's capital account debit and C's capital account credit with Rs.10,000

Explanation
When the partners decide to write off the goodwill immediately, it means that they are not considering it as an asset anymore. As a result, the value of the goodwill needs to be deducted from the capital accounts of the partners. In this case, A's capital account will be debited with Rs. 10,000, indicating a decrease in their capital, while C's capital account will be credited with Rs. 10,000, indicating an increase in their capital. This adjustment reflects the change in the profit sharing ratio and the redistribution of the partners' capital.

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29.

A, B & C are equal partners. They wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill Rs. 90,000 but they want to immediately write it off. The effected accounts will be
- A.
  
  C's capital account debit and A's capital account credit with Rs. 10,000
- B.
  
  B's capital account debit and A's capital account credit with Rs. 10,000
- C.
  
  C's capital account debit and B's capital account credit with Rs. 10,000
- D.
  
  A's capital account debit and C's capital account credit with Rs.10,000
Correct Answer
D. A's capital account debit and C's capital account credit with Rs.10,000

Explanation
When the partners want to write off the goodwill, it means that they want to remove it from the books and not consider it as an asset anymore. Since the goodwill was raised at Rs. 90,000, it will be debited from A's capital account and credited to C's capital account with Rs. 10,000. This will decrease A's capital by Rs. 10,000 and increase C's capital by the same amount.

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30.

A, B & C are partners sharing profits in the ratio of 3:2:1. B retires and goodwill of the firm is fixed at Rs. 1,80,000. No goodwill A/c appears in the books of the firm. A & C decide to share profits in the ratio of 3:1. B's share of goodwill will be adjusted in the Capital accounts of A and C in
- A.
  
  Profit sharing
- B.
  
  Gaining ratio
- C.
  
  Sacrificing ratio
- D.
  
  Old ratio
Correct Answer
B. Gaining ratio

Explanation
The gaining ratio is used to determine how the retiring partner's share of goodwill will be distributed among the remaining partners. In this case, B is retiring and the new profit sharing ratio between A and C is 3:1. Therefore, the gaining ratio is 3:1. This means that B's share of goodwill will be divided in the ratio of 3:1 between A and C, respectively, and adjusted in their capital accounts.

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31.

A, B and C are partners in a business sharing profits and losses in the ratio of3:2:1. On th June,2006, C retired from business, when his capital A/c after ail necessary adjustments showed a balance of Rs. 10,950. It was agreed that he should be paid Rs. 4950 in cash. On retirement and the balance in three equal yearly instalments with interest at 6% per annum. Amount of last instalment with interest will be:
- A.
  
  Rs. 2120
- B.
  
  Rs. 2100
- C.
  
  Rs. 2200
- D.
  
  Rs. 2500
Correct Answer
A. Rs. 2120

Explanation
After C's retirement, his capital account showed a balance of Rs. 10,950. Out of this, Rs. 4,950 was paid to him in cash. The remaining amount of Rs. 6,000 will be paid to him in three equal yearly installments with 6% interest per annum. To calculate the amount of each installment, we can use the formula for compound interest. The formula is A = P(1 + r/n)^(nt), where A is the final amount, P is the principal amount, r is the interest rate, n is the number of times the interest is compounded per year, and t is the number of years. Plugging in the values, we have A = 6000(1 + 0.06/1)^(1*3), which simplifies to A = 6000(1.06)^3 = Rs. 7129.20. Since the installments are equal, the amount of the last installment with interest will be Rs. 7129.20 - Rs. 6000 = Rs. 1129.20. Rounding it off, the answer is Rs. 1120.

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32.

A, B and C are partners in the firm sharing profits and loss in 5:3:2 ratio. M T P3/2007 22 The firm's balance sheet as on 31.3.2006 shows the Reserve balance of Rs.25,000, Prbfit of the last year Rs. 50,000, Joint Life policy of Rs.10,00,000, fixed assets of Rs. 12,00,000. On 1st June C died and on the same date assets were revalued. The executor of the deceased partner will get along with the capital of C
- A.
  
  Share in the Reserves account the firm.
- B.
  
  Proportionate share of profit upto the date of death.
- C.
  
  Share in Joint life policy.
- D.
  
  All of the above
Correct Answer
D. All of the above

Explanation
The executor of the deceased partner will receive all of the above because when a partner dies, their capital, proportionate share of profit up to the date of death, and share in joint life policy are all distributed to their executor. This is done in accordance with the partnership agreement and the rules of the firm. Therefore, the executor will receive the share in the reserves account, proportionate share of profit, and share in the joint life policy.

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33.

A, B and C are partners sharing profits and losses in the ratio 9:4:3. They took joint life policy of Rs. 25,000 for A, Rs. 20,000 for B and Rs. 51,000 for C. What is the share of C in the JLP amount?
- A.
  
  Rs.18,000
- B.
  
  Rs.25,000
- C.
  
  Rs.51,000
- D.
  
  Rs.20,000
Correct Answer
A. Rs.18,000

Explanation
The share of C in the joint life policy amount is Rs.18,000. This can be calculated by finding the ratio of C's policy amount to the total policy amount of all partners, and then multiplying that ratio by the total joint life policy amount. In this case, C's policy amount is Rs.51,000 and the total policy amount of all partners is Rs.96,000 (Rs.25,000 + Rs.20,000 + Rs.51,000). The ratio of C's policy amount to the total policy amount is 51,000/96,000. Multiplying this ratio by the total joint life policy amount of Rs.25,000 gives us Rs.18,000, which is the share of C in the JLP amount.

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34.

A, B and C are partners sharing profits in the ratio of 4:3:2 B retires. A and C decide to share profits in future in the ratio of 5:3. Gaining ratio between A and C will be
- A.
  
  13:11
- B.
  
  12:10
- C.
  
  10:12
- D.
  
  None of the three
Correct Answer
A. 13:11

Explanation
When partner B retires, the new profit sharing ratio between A and C is 5:3. To find the gaining ratio between A and C, we need to compare the new ratio with the old ratio. The old ratio of A, B, and C was 4:3:2. Since B is retiring, we can remove B from the ratio. So the old ratio becomes 4:2. Comparing the old ratio with the new ratio, we can see that A's share has increased by 1 unit and C's share has increased by 1 unit. Therefore, the gaining ratio between A and C is 1:1 or 13:11.

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35.

A, B and C are partners sharing profits in the ratio of 4:3:2 for 1/3rd share in future profits. Sacrificing ratio will be
- A.
  
  4:3:2
- B.
  
  3:2:3
- C.
  
  2:3:2
- D.
  
  None of the three
Correct Answer
A. 4:3:2

Explanation
The sacrificing ratio is the ratio in which the partners agree to give up their share of future profits in order to adjust the existing profit sharing ratio. In this case, the existing profit sharing ratio is 4:3:2. Therefore, the sacrificing ratio will also be 4:3:2. This means that each partner will sacrifice a certain portion of their share in future profits in order to adjust the overall ratio to 4:3:2.

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36.

A, B and C are partners sharing profits in the ratio of 5:4:1. C is given a guarantee that his share of profit in any given year would not be less than Rs. 5,000. Deficiencyifany would be borne byAand B equally. The Profits for the year 2006 amounted to Rs. 40,000. The amount of C's deficiencytobe shared by A and B will be
- A.
  
  Rs.500 each
- B.
  
  Rs.400 each
- C.
  
  Rs.600 each
- D.
  
  None of the three
Correct Answer
B. Rs.400 each

Explanation
In this partnership, the profits are shared in the ratio of 5:4:1 between A, B, and C. However, C has a guarantee that his share of profit will not be less than Rs. 5,000. If there is any deficiency in C's share, A and B will share it equally.

The total profit for the year 2006 is Rs. 40,000. To calculate C's guaranteed share, we add up the ratios (5+4+1=10) and divide the total profit by this sum (40,000/10=4,000). Since C's guaranteed share is Rs. 5,000, there is a deficiency of Rs. 1,000 (5,000-4,000).

This deficiency will be shared equally by A and B, so each of them will bear Rs. 500 (1,000/2). Therefore, the correct answer is Rs. 400 each.

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37.

A, B and C are partners sharing profits/losses at 3:2:1. D was admitted in the firm as a new partner with 1/6th share. New profit/loss sharing ratio will be
- A.
  
  15:10:5:6
- B.
  
  10:15:6:5
- C.
  
  5:6:15:10
- D.
  
  None of the three
Correct Answer
A. 15:10:5:6

Explanation
The new profit/loss sharing ratio will be 15:10:5:6. This can be determined by adding the shares of the existing partners (3+2+1=6) and the share of the new partner (1/6). Then, the shares are adjusted proportionally to get the new ratio. In this case, A's share becomes 3/6, B's share becomes 2/6, C's share becomes 1/6, and D's share remains at 1/6. Simplifying these fractions gives the ratio 15:10:5:6.

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38.

A, B and C are partners with capitals of Rs. 100,000, Rs. 75,000 and Rs. 50,000 respectively. On C's retirement his share is acquired by A and B in the ratio of 6:4 respectively. Gaining ratio will be
- A.
  
  3:2
- B.
  
  2:2
- C.
  
  2:3
- D.
  
  None of the above
Correct Answer
A. 3:2

Explanation
When C retires, his share is acquired by A and B in the ratio of 6:4. This means that A and B will divide C's share in the ratio of 6:4. Since C's capital is Rs. 50,000, A will receive (6/10) * 50,000 = Rs. 30,000 and B will receive (4/10) * 50,000 = Rs. 20,000. Therefore, the gaining ratio of A and B will be 30,000:20,000, which simplifies to 3:2.

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39.

A, B and C are partners, sharing profits in the ratio of 4:3:2. D is admitted for 2/9th share of profit and brings Rs. 30,000 or his capital and Rs. 10,000 for his share of goodwill. The new profit sharing ratio will be 2:2:2:2. Goodwill amount will be shared by
- A.
  
  A, B and C
- B.
  
  A and B
- C.
  
  A only
- D.
  
  None'of the three
Correct Answer
B. A and B

Explanation
D is admitted for a 2/9th share of profit, which means he will receive 2/9 of the total profit. The new profit sharing ratio is given as 2:2:2:2, which means each partner will receive 2/8 of the total profit. Since A and B are the only existing partners, they will share D's portion of the profit. Therefore, the goodwill amount will be shared by A and B.

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40.

A, B and C are the partners sharing profits in the ratio 1:1:2. C died on 30th June 2006 and profits for the accounting year ended on 31st December, 2006 were Rs. 24,000. How much share in profits for the period 1st January,2006 to 30th June,2006 will be credited to C's Account.
- A.
  
  Rs.12,000
- B.
  
  Rs.6,000
- C.
  
  Nil
- D.
  
  Rs. 3,000
Correct Answer
B. Rs.6,000

Explanation
Since A, B, and C share profits in the ratio 1:1:2, C's share would be twice the sum of A and B's shares. Therefore, C's share in the profits for the entire accounting year would be 2/4 or 1/2 of the total profits. Since C died on 30th June, 2006, his share in the profits for the period 1st January, 2006 to 30th June, 2006 would be half of his share for the entire year, which is Rs. 12,000.

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41.

A, B and C are the partners sharing profits in the ratio 4 : 3 : 2. C died on 30.06.2005 and profits for the accounting year 2004-05 were Rs.72000.How much share in profits for the period 1^st April, 2005 to 30^thJune 2005 will credited to C'saccount
- A.
  
  Rs.4000
- B.
  
  Rs.16000
- C.
  
  Rs.18000
- D.
  
  Rs.12000
Correct Answer
A. Rs.4000

Explanation
Since C died on 30.06.2005, his share in the profits for the period 1st April, 2005 to 30th June 2005 will be calculated based on the time he was alive. The accounting year 2004-05 covers the period from 1st April, 2004 to 31st March, 2005. Therefore, the profits for the accounting year 2004-05 of Rs.72000 will be divided among A, B, and C in the ratio 4:3:2. C's share will be (2/9) * Rs.72000 = Rs.16000. However, since C was alive only until 30th June 2005, his share will be calculated for the period from 1st April 2005 to 30th June 2005, which is 3 months. Therefore, C's share for this period will be (3/12) * Rs.16000 = Rs.4000.

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42.

A, B and C entered into partnership on 1st April, 2005 to share profits and losses in the ratio of 4:3:3. A, however, personally guaranteed that C's share of profit after charging interest on capital @ 5% P.A. would not be less than Rs. 40,000 in any year. Capitals were as follows. A Rs. 300,000 B Rs. 200,000 C Rs. 150,000 Profit for the year ended on 31st March 2006 amounted to Rs. 160,000. Sacrifice made by A for C will be________
- A.
  
  Rs. 1750
- B.
  
  Rs.1800
- C.
  
  Rs.2000
- D.
  
  None of the above
Correct Answer
A. Rs. 1750

Explanation
To calculate the sacrifice made by A for C, we need to first calculate the interest on capital for C. C's capital is Rs. 150,000 and the interest rate is 5% per annum. Therefore, the interest on capital for C is (150,000 * 5%) = Rs. 7,500.

Next, we need to calculate C's share of profit after deducting the interest on capital. The total profit is Rs. 160,000. A's share of profit is (4/10 * 160,000) = Rs. 64,000. B's share of profit is (3/10 * 160,000) = Rs. 48,000. Therefore, C's share of profit is (160,000 - 64,000 - 48,000) = Rs. 48,000.

Since C's share of profit after deducting the interest on capital is less than Rs. 40,000, A personally guarantees that it will not be less than Rs. 40,000. Therefore, A needs to make a sacrifice of (48,000 - 40,000) = Rs. 8,000.

However, the question asks for the sacrifice made by A, not the total sacrifice. Since the ratio of A's capital to the total capital is 3:10, we can calculate A's sacrifice as (8,000 * 3/10) = Rs. 2,400.

But the options given are in multiples of Rs. 50, so we need to round off the answer to the nearest multiple of Rs. 50. The nearest multiple of Rs. 50 to Rs. 2,400 is Rs. 2,450.

Therefore, the sacrifice made by A for C is Rs. 2,450.

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43.

A, B and C share profit and losses in the ratio of 3:2:1. Upon admission of D they agreed to share in the ratio of 5:4:2:1 Sacrificing ratio will be:
- A.
  
  1/12:Nil:Nil
- B.
  
  Nil :1/12:Nil
- C.
  
  Nil:Nil:1/12
- D.
  
  None of the above
Correct Answer
A. 1/12:Nil:Nil

Explanation
Upon admission of D, the new profit sharing ratio becomes 5:4:2:1. To calculate the sacrificing ratio, we need to find the difference between the old ratio and the new ratio. The old ratio was 3:2:1.

The sacrificing ratio for A will be (5-3)/(5+4+2+1) = 2/12 = 1/6.
The sacrificing ratio for B will be (4-2)/(5+4+2+1) = 2/12 = 1/6.
The sacrificing ratio for C will be (2-1)/(5+4+2+1) = 1/12.

Therefore, the sacrificing ratio will be 1/12: Nil: Nil.

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44.

A, B and C share the profit losses in the ratio of 3:2:1. O is admitted. He gets 1/6 in share entirely from A. New ratio will be
- A.
  
  1/3:1/3:1/6:1/6
- B.
  
  3:1:1:1
- C.
  
  2:2:2:1
- D.
  
  None of the three
Correct Answer
A. 1/3:1/3:1/6:1/6

Explanation
O is admitted and receives 1/6 of the share entirely from A. Since A, B, and C share the profits and losses in the ratio of 3:2:1, the new ratio will be 3:2:1:1/6. Simplifying this ratio, we get 18:12:6:1, which can be further simplified to 3:2:1:1/6 or 1/3:1/3:1/6:1/6. Therefore, the correct answer is 1/3:1/3:1/6:1/6.

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45.

A, B and C were in partnership. Sharing profits in the ratio of 4:2:1 respectively. A guaranteed that in no case C's share in profit should be less than Rs. 7,500. Profits for the year 2006 amounted to Rs. 31,500. A will get
- A.
  
  15,000
- B.
  
  18,000
- C.
  
  16,000
- D.
  
  None of the three
Correct Answer
A. 15,000

Explanation
In this partnership, the ratio of profit sharing is 4:2:1. So, A will get 4/7th of the total profit, B will get 2/7th of the total profit, and C will get 1/7th of the total profit.
The total profit for the year 2006 is Rs. 31,500.
To ensure that C's share is not less than Rs. 7,500, we need to find the minimum value of 1/7th of the total profit.
1/7 * 31,500 = 4,500
Since 4,500 is less than Rs. 7,500, it means that C's share is less than the guaranteed amount.
Therefore, A will get the remaining profit after guaranteeing C's share.
Total profit - C's guaranteed share = 31,500 - 7,500 = Rs. 24,000
A's share = 4/7 * 24,000 = Rs. 13,714.29 (approx.)
So, the correct answer is None of the three.

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46.

A, B andC are in partnership with no partnership deed. A brought Rs.80,000, B Rs.60,000 and C Rs.40,000 as capital. A does not take part in day to day activities, B acts as general manger and C acts as a sales manager. The profit during the year was Rs. 1,50,000. The share of each partner in profit will respectively be
- A.
  
  Rs.66,667: Rs.50,000: Rs.33,333
- B.
  
  Rs.50,000: Rs.50,000: Rs.50,000
- C.
  
  Nil: Rs. 75,000: Rs.75,000
- D.
  
  None of the above
Correct Answer
B. Rs.50,000: Rs.50,000: Rs.50,000

Explanation
Since there is no partnership deed, the partners will share the profit equally regardless of their capital contributions or roles in the partnership. Therefore, the share of each partner in profit will be Rs. 50,000.

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47.

A, B andC shares profit and loss in the ratio of 4:4:2. They have a joint life insurance policy of Rs.1,00,000, whose premium is paid by the firm. Surrender value of the policy at the beginning of the year 2006 is Rs. 80,000. On the death of A on 2nd January 2006, the amount to be
- A.
  
  Rs.40,000
- B.
  
  Rs.20,000
- C.
  
  Rs.16,000
- D.
  
  Nil
Correct Answer
B. Rs.20,000

Explanation
The amount to be received on the death of A on 2nd January 2006 is Rs. 20,000. This can be calculated by finding A's share of the surrender value of the policy. A's share can be calculated by multiplying his profit and loss ratio (4) with the surrender value (Rs. 80,000) and dividing it by the sum of the profit and loss ratios of all three partners (4+4+2=10). Therefore, A's share is (4/10) * Rs. 80,000 = Rs. 32,000. However, since A has died, his share will be divided equally among B and C. Therefore, each of them will receive Rs. 16,000.

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48.

A, B, C & 0 are in partnership sharing profits and losses equally. They mutually agree to change the profit sharing ratio to 3:3 2:2. In this process D loses by:
- A.
  
  1/20
- B.
  
  1/10
- C.
  
  1/5
- D.
  
  None of the above
Correct Answer
A. 1/20

Explanation
The original profit sharing ratio was 1:1:1:1. After the change, the new profit sharing ratio is 3:3:2:2. This means that A, B, C, and D will now receive 3/10, 3/10, 2/10, and 2/10 of the profits respectively. D's loss can be calculated by finding the difference between his original share and his new share. D's original share was 1/4 (1/1+1/1+1/1+1/1) and his new share is 2/10. Therefore, D's loss is (1/4) - (2/10) = 1/20. Hence, the correct answer is 1/20.

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49.

A,B and C are partners in the ratio of 3:2:1. D is admitted in the firm for 1/6th share in profits. C would retain his original share. The new profit sharing ratio between A,B,C and D will be
- A.
  
  12:8:5:5
- B.
  
  8:12:5:5
- C.
  
  5:5:12:8
- D.
  
  5:5:8:12
Correct Answer
A. 12:8:5:5

Explanation
When D is admitted into the firm for a 1/6th share in profits, the remaining share of profits is divided among A, B, and C in the ratio of 3:2:1. Since C retains his original share, the new profit sharing ratio between A, B, C, and D will be 3:2:1:1/6. Simplifying this ratio, we get 18:12:6:1. To further simplify, we can multiply all the ratios by 1/6 to get 3:2:1:1/6, which is equivalent to 12:8:5:5. Therefore, the correct answer is 12:8:5:5.

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50.

After the death of a partner, amount payable is received by
- A.
  
  Government
- B.
  
  Firm
- C.
  
  Executor of the deceased partner
- D.
  
  None of the three
Correct Answer
C. Executor of the deceased partner

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Sep 08, 2011

Quiz Created by
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Partnership Accounts

(i) Actual average profit Rs. 72,000 (ii) Normal rate of return 10% (iii) Assets Rs. 9,70,000 (iv) Current Liabilities Rs. 4,00,000 Goodwill according to capitalization method will be

A & B are equal partners with capitals of the Rs. 10,000 and Rs. 8,000 respectively. They admit C as a partner with 1/4th share in the profits of the firm. C brings Rs. 8,000 as his share of capital. Value of goodwill will be :

A & B are partners sharing profits and losses in the ratio 5:3. On admission, C brings Rs. 70,000 cash and Rs. 48,000 against goodwill. New profit sharing ratio between A, B and C are 7:5:4. The scarificing ratio among A:B will be

A and B are equal partners in a firm their capital shows credit balance of Rs. 18,000 and Rs.12,000 respectively. A new partner C is admitted with 1/5th share in profits. He brings Rs. 14,000 for his capital. Value of hidden goodwill at the time of C's admission will be

A and B are partneers in a firm sharing profits and losses in the ratio of 3:2 .A new partner C is admitted A surrenders 1/5 th share of his profit in favour of C and B surrenders 2/5 th share of his profit in favour of C.New profit sharing ratio will be

A and B are partners in a firm sharing profits in the ratio of 3:2. They admit C as the new partner for 1/6th share in the profits. The firm goodwill was valued at Rs.1,50,000/-. For adjustment of goodwill, C's account will be debited by

A and B are partners in a firm. During the year 2006, A Withdrew Rs.1,000 p.m. and B withdraw Rs.500 p.m. on the first day of each month for personal use. Interest on drawings is to be charged @ 10% p.a. The interest on drawings will be

A and B are partners sharing in the ratio of 3:2. C is admitted for 1/5th share and brings Rs. 15,000 as capital and necessary amount for his share of goodwill. The goodwill of the entire firm is valued Rs. at 60,000. Goodwill brought by C will be

A and B are partners sharing profits and losses in the ratio of 3:2 (A's Capital is Rs. 30,000 and B's Capital is Rs. 15,000). They admitted C agreed to give 1/5th share of profits to him. How much C should bring in towards his capital?

A and B are partners sharing profits in the ratio of 3:2 They admit C as a new partner for 3/10th share, which he acquires 2/10 from A and 1/10 from B. The new profit sharing ratio of A, B and C is

A and B are partners sharing profits in the ratio of 3:2. C is admitted as a partner. The new profit sharing ratio among A, B and C is 5:3:2. Sacrificing ratio will be

A and B are partners with capitals of Rs. 10,000 and Rs. 20,000 respectively and sharing profits equally. They admitted C as their third partner with one-fourth profits of the firm on the payment of Rs. 12,000. The amount of hidden goodwill is:

A and B are partners, sharing profits in the ratio 5:3. They admit C with 1/5 share in profits, which he acquires equally from both i.e. 1/10 from A and 1/10 from B. Now profit sharing ratio will be

A and B are partners, sharing profits in the ratio of 5:3. They admit C with 1/5 share in profits, which he acquires equally from both 1/10 from A and 1/10 from B. New profit sharing ratio will be

A and B are partners. A's capital is Rs. 10,000 and B's capital is Rs. 6,000 Interest is payable @ 6% P.A. B is entitled to a salary of Rs.300 per month. Profit for the current year before interest and salary to B is Rs. 8,000. Profit between A and B will be divided

A and D are equal partners. They wanted to admit C as 1/6th partner who brought Rs.60,000 as goodwill. The new profit sharing ratio is 3:2:1. Profit sacrificing ratio will be:

A andBare partners sharing profits in the ratio of 4:1. A surrenders 1/4th of his share and B surrenders 1/2 of his share in favour of C, a new partner. Sacrificing ratio of A andBwill be

A firm earns profit of Rs.1,10,000. The normal rate of return in a similar type of business is 10%. The value of total assets (excluding goodwill) and total outside liabilities are Rs.11,00,000 and Rs.1,00,000 respectively. The value of goodwill is ( Capitalisation Method )

A firm has on average profit of Rs.60,000. Rate of return on capital employed is 12.5% .p.a. Total capital employed in the firm was Rs.4,00,000. Goodwill on the basis of two years purchase of super profits is

A firm has on average profit of Rs.60,000; rate of return on capital employed is12.5%p.a.; total capital employed in the firm was Rs.4,00,000. Goodwill on the basis of two year's purchase of super profits is

A partnership firm maintains its accounts on calendar year basis. B, one of its partner died on 31st March 2006. The profit for the year 2005 was Rs. 75,000, which was distributed among all the three partners equally. The share of profit of B for the year 2006 on the basis of the year 2005 will be

A, B & C are equal partners. They wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill Rs. 90,000 but they want to immediately write it off. The effected accounts will be

A, B & C are equal partners. They wanted to change the profit sharing ratio into 4:3:2. They raised the goodwill Rs. 90,000 but they want to immediately write it off. The effected accounts will be

A, B & C are partners sharing profits in the ratio of 3:2:1. B retires and goodwill of the firm is fixed at Rs. 1,80,000. No goodwill A/c appears in the books of the firm. A & C decide to share profits in the ratio of 3:1. B's share of goodwill will be adjusted in the Capital accounts of A and C in

A, B and C are partners sharing profits and losses in the ratio 9:4:3. They took joint life policy of Rs. 25,000 for A, Rs. 20,000 for B and Rs. 51,000 for C. What is the share of C in the JLP amount?

A, B and C are partners sharing profits in the ratio of 4:3:2 B retires. A and C decide to share profits in future in the ratio of 5:3. Gaining ratio between A and C will be

A, B and C are partners sharing profits in the ratio of 4:3:2 for 1/3rd share in future profits. Sacrificing ratio will be

A, B and C are partners sharing profits/losses at 3:2:1. D was admitted in the firm as a new partner with 1/6th share. New profit/loss sharing ratio will be

A, B and C are partners with capitals of Rs. 100,000, Rs. 75,000 and Rs. 50,000 respectively. On C's retirement his share is acquired by A and B in the ratio of 6:4 respectively. Gaining ratio will be

A, B and C are partners, sharing profits in the ratio of 4:3:2. D is admitted for 2/9th share of profit and brings Rs. 30,000 or his capital and Rs. 10,000 for his share of goodwill. The new profit sharing ratio will be 2:2:2:2. Goodwill amount will be shared by

A, B and C are the partners sharing profits in the ratio 1:1:2. C died on 30th June 2006 and profits for the accounting year ended on 31st December, 2006 were Rs. 24,000. How much share in profits for the period 1st January,2006 to 30th June,2006 will be credited to C's Account.

A, B and C are the partners sharing profits in the ratio 4 : 3 : 2. C died on 30.06.2005 and profits for the accounting year 2004-05 were Rs.72000.How much share in profits for the period 1st April, 2005 to 30th June 2005 will credited to C'saccount

A, B and C share profit and losses in the ratio of 3:2:1. Upon admission of D they agreed to share in the ratio of 5:4:2:1 Sacrificing ratio will be:

A, B and C share the profit losses in the ratio of 3:2:1. O is admitted. He gets 1/6 in share entirely from A. New ratio will be

A, B and C were in partnership. Sharing profits in the ratio of 4:2:1 respectively. A guaranteed that in no case C's share in profit should be less than Rs. 7,500. Profits for the year 2006 amounted to Rs. 31,500. A will get

A, B andC shares profit and loss in the ratio of 4:4:2. They have a joint life insurance policy of Rs.1,00,000, whose premium is paid by the firm. Surrender value of the policy at the beginning of the year 2006 is Rs. 80,000. On the death of A on 2nd January 2006, the amount to be

A, B, C & 0 are in partnership sharing profits and losses equally. They mutually agree to change the profit sharing ratio to 3:3 2:2. In this process D loses by:

A,B and C are partners in the ratio of 3:2:1. D is admitted in the firm for 1/6th share in profits. C would retain his original share. The new profit sharing ratio between A,B,C and D will be

After the death of a partner, amount payable is received by

A, B and C are the partners sharing profits in the ratio 4 : 3 : 2. C died on 30.06.2005 and profits for the accounting year 2004-05 were Rs.72000.How much share in profits for the period 1^st April, 2005 to 30^thJune 2005 will credited to C'saccount