A & B are partners sharing profits & losses in the ratio of 3:2. C was...
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A & B are partners sharing profits & losses in the ratio of 3:2. C was admitted to the firm and to introduce a capital of Rs 25,000. The new profit sharing ratio of A, B and C will be 3:2:1 respectively. C is unable to bring in cash for his share of goodwill, partners therefore, decide to raise goodwill account in the books of the firm. They further decide to calculate goodwill on the basis of C's share in the profits and the capital contribution made by him to the firm. Before admission of C capital account balance of A & B was Rs 44,000 & Rs 36,000 respectively. Total goodwill to be raised in the books of the firm = ? A & B are partners sharing profits & losses in the ratio of 3:2. C was admitted to the firm and to introduce a capital of Rs 25,000. The new profit sharing ratio of A, B and C will be 3:2:1 respectively. C is unable to bring in cash for his share of goodwill, partners therefore, decide to raise goodwill account in the books of the firm. They further decide to calculate goodwill on the basis of C's share in the profits and the capital contribution made by him to the firm. Before admission of C capital account balance of A & B was Rs 44,000 & Rs 36,000 respectively. Total goodwill to be raised in the books of the firm = ?
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A s Share in Good will 3 6 25 000 3 Rs 8 333 33 B s Sh... View the full answer
Related Book For
Cornerstones of Financial and Managerial Accounting
ISBN: 978-1111879044
2nd edition
Authors: Rich, Jeff Jones, Dan Heitger, Maryanne Mowen, Don Hansen
Posted Date:
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