A and B are partners sharing profits profits in the ratio of 3: 2. They decided...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
A and B are partners sharing profits profits in the ratio of 3: 2. They decided to admit C as a partner from 1st April, 2018 on the following terms: (i) C will be given 2/5th share of the profit. (ii) Goodwill of the firm will be valued at two years purchase of three years normal average profit of the firm. Profit of the previous three years ended 31st March, were: 2018---Profit Rs.30, 000(after debiting loss of stock by fire Rs. 40,000) 2017---Loss Rs. 80,000 (includes voluntary retirement compensation paid Rs. 1, 10,000 ). 2016---Profit Rs.1, 10, 000 (including a gain (profit) of Rs. 30, 000 on the sale of fixed assets). you are required to value the goodwill. A and B are partners sharing profits profits in the ratio of 3: 2. They decided to admit C as a partner from 1st April, 2018 on the following terms: (i) C will be given 2/5th share of the profit. (ii) Goodwill of the firm will be valued at two years purchase of three years normal average profit of the firm. Profit of the previous three years ended 31st March, were: 2018---Profit Rs.30, 000(after debiting loss of stock by fire Rs. 40,000) 2017---Loss Rs. 80,000 (includes voluntary retirement compensation paid Rs. 1, 10,000 ). 2016---Profit Rs.1, 10, 000 (including a gain (profit) of Rs. 30, 000 on the sale of fixed assets). you are required to value the goodwill.
Expert Answer:
Related Book For
Accounting What the Numbers Mean
ISBN: 978-0078025297
10th edition
Authors: David H. Marshall, Wayne W. McManus, Daniel F. Viele
Posted Date:
Students also viewed these accounting questions
-
Analyzing your industry In every industry, no matter what product or service it provides, there are five basic forces of competition. Taken together they determine the industry's attractiveness and...
-
During the year, credit sales amounted to $810,000. Cash collected on credit sales amounted to $770,000, and $17,000 has been written off. At the end of the year, the company adjusted for bad debts...
-
Based on Amazon's challenges, strategies, trends in stock prices, and overall financial strengths since the start of the company, provide an evaluation of the efficiency and effectiveness of Amazon.
-
Q1. a)Analyse Spencers experience in terms of consumer behavior framework in your notes. What variables and processes can you identify that appear to work in this situation? Does this situation...
-
Name the three court case reporters that publish tax and non-tax district court decisions. Illustrate the elements of a citation that might be found in each reporter. Explain what each part of the...
-
Show graphically the profit and futures price relationships at expiration for the following positions on five-year T-note futures options with an exercise price of \(\$ 120,000\) (for T-note with...
-
Refer to the bond situation of Hewitt Corporation in Exercise 15-27. Hewitt issued the bonds at the advertised price. The company uses the straight-line amortization method and reports financial...
-
In a production facility, 1.2-in-thick, 2-ft = 2-ft square brass plates (r = 532.5 lbm/ft3 and cp = 0.091 Btu/lbm ¢ °F) that are initially at a uniform temperature of 75°F are heated by...
-
Identify two barriers to decision making. Explain the barrier and how an effective manager can overcome the barrier.
-
Paoli Consulting is a consulting firm owned and operated by Mary Paoli. The following end-of-period spreadsheet was prepared for the year ended March 31, 2019: During the year ended March 31, 2019,...
-
You manage a chemical plant within a refinery complex that produces 60,000 tonne/y of methyl tertiary-butyl ether (MTBE). MTBE is a gasoline additive used to increase octane number that is produced...
-
The president of your company (a multidivision company) has been discussing his company's internal operations with several colleagues in the business community. He has discovered that most of them...
-
G. Johnson, a local real estate broker, is a member of the board of directors of Pennset Corporation. At a recent Board meeting, called to discuss financial plans, Mr. Johnson discovered two planned...
-
Select the best answer for each of the following questions. Explain the reasons for your selection. a. Internal auditing can best be described as: (1) An accounting function. (2) A compliance...
-
What is the nature of the general standards?
-
The auditor's standard report contains the words generally accepted auditing standards, auditing procedures, and generally accepted accounting principles. Required: a. Indicate the paragraphs of the...
-
Organizations are systems of "control" that each of us will find ourselves engaged with for our entire work life. Even at dear old PSU you see elements of that control everywhere you look. At our...
-
Which of the following is NOT a magnetic dipole when viewed from far away? a) A permanent bar magnet. b) Several circular loops of wire closely stacked together with the same current running in each...
-
Calculate net income (or loss) using the accounting equation. At the beginning of the current fiscal year, the balance sheet for Davis Co. showed liabilities of $640,000. During the year liabilities...
-
Variable overhead variances In addition to the information for Acme Company in Mini-Exercises 15.1 and 15.2, the standard variable overhead rate per unit consists of $6 per machine hour and each unit...
-
In addition to the information presented in Mini Exercise 14.1, each unit that ABC Company produces uses 3 pounds of raw material. ABC requires 25% of the next month's budgeted production as raw...
-
If the ratio of the tensions on tight and slack sides of a belt drive is increased by \(20 \%\), the power is (a) increased by \(20 \%\) (b) decreased by \(20 \%\) (c) unaffected (d) unpredictable.
-
The initial tension in a flat belt drive is \(1800 \mathrm{~N}\) and angle of lap on the smaller pulley is \(170^{\circ}\). The coefficient of friction between belt and pulley surface is 0.25 . The...
-
Determine the maximum power that can be transmitted by a belt of \(100 \mathrm{~mm} \times 10 \mathrm{~mm}\) size with an angle of lap of \(160^{\circ}\). The belt density is \(1000 \mathrm{~kg} /...
Study smarter with the SolutionInn App