Mr. A commenced business with a capital Rs.2, 50, 000 on 1 April, 2013. During the...

 

Transcribed Image Text:

Mr. A commenced business with a capital Rs.2, 50, 000 on 1 April, 2013. During the five years ended 31 March, 2018, the following profits and losses were made: 31 March, 2014 - Loss Rs.5, 000 31 March, 2015 - Profit Rs.13,000 31 March, 2016 = Profit Rs.17,000 31 March, 2017 - Profit Rs.20,000 31 March, 2018 - Profit Rs.25,000 During this period he had drawn Rs.40,000 for his personal use. On 1st April, 2018, he admitted B into partnership on the following terms: B to bring for his half share in the business, capital equal to A's Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount B should invest to become a partner and pass entries to record the transaction relating to admission. Mr. A commenced business with a capital Rs.2, 50, 000 on 1 April, 2013. During the five years ended 31 March, 2018, the following profits and losses were made: 31 March, 2014 - Loss Rs.5, 000 31 March, 2015 - Profit Rs.13,000 31 March, 2016 = Profit Rs.17,000 31 March, 2017 - Profit Rs.20,000 31 March, 2018 - Profit Rs.25,000 During this period he had drawn Rs.40,000 for his personal use. On 1st April, 2018, he admitted B into partnership on the following terms: B to bring for his half share in the business, capital equal to A's Capital on 31st March, 2018 and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount B should invest to become a partner and pass entries to record the transaction relating to admission.

Answer rating: 100% (QA)

Capital as on April1 2013 Less Loss on 31st March 2014 Add Profit on 31st March 2015 Add ... View the full answer