1.

A and B, carrying on business in partnership and sharing profits and losses in the ratio of 3 : 2, require a partner, when their Balance Sheet stood as: They admit C into partnership and give him 1/8th share in the future profits on the following terms: (a) Goodwill of the firm be valued at twice the average of the last three years profits which amounted to ₹ 21,000; ₹ 24,000 and ₹ 25,560. (b) C is to bring in cash for the amount of his share of goodwill. (c) C is to bring in cash ₹ 15,000 as his capital. Pass journal entries recording these transactions, draw out the Balance Sheet of the new firm and state new profit-sharing ratio.

Answer»

Self-employed people, partners and PARTNERSHIPS are not required to submit formal accounts and balance SHEETS on their tax return. However, the RETURNS do require the relevant financial details to be entered in a set format, so you may find it beneficial to prepare the FIGURES in a balance sheet format.



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