Kanu, Manu and Akansha are partners sharing profits as 20%, 30% and 50%. Kanu decided to retire with the consent of other partners and sold her share to Manu. Goodwill was valued at two and a half years purchase of the average profits of three years. Profits of these three years were Rs 50,000, Rs 70,000 and Rs 60,000. Reserve fund stood in the balance sheet at Rs 30,000 at the time of her retirement. You are required to record necessary journal entries to record above adjustments on Kanu's retirement. Also prepare her capital account to find out the amount due to her when her capital balance in the balance sheet was Rs 1,00,000 before any above adjustment.

Kanu, Manu and Akansha are partners sharing profits as 20%, 30% and 50

1.	Kanu, Manu and Akansha are partners sharing profits as 20%, 30% and 50%. Kanu decided to retire with the consent of other partners and sold her share to Manu. Goodwill was valued at two and a half years purchase of the average profits of three years. Profits of these three years were Rs 50,000, Rs 70,000 and Rs 60,000. Reserve fund stood in the balance sheet at Rs 30,000 at the time of her retirement. You are required to record necessary journal entries to record above adjustments on Kanu's retirement. Also prepare her capital account to find out the amount due to her when her capital balance in the balance sheet was Rs 1,00,000 before any above adjustment.
Answer» Kanu, Manu and Akansha are partners sharing profits as 20%, 30% and 50%. Kanu decided to retire with the consent of other partners and sold her share to Manu. Goodwill was valued at two and a half years purchase of the average profits of three years. Profits of these three years were Rs 50,000, Rs 70,000 and Rs 60,000. Reserve fund stood in the balance sheet at Rs 30,000 at the time of her retirement. You are required to record necessary journal entries to record above adjustments on Kanu's retirement. Also prepare her capital account to find out the amount due to her when her capital balance in the balance sheet was Rs 1,00,000 before any above adjustment.

Discussion

No Comment Found

Related InterviewSolutions

Comparative financial statements present financial data for several years side by side. Data may be presented in the form of ___
From thefollowing data, calculate Personal Income and Personal DisposableIncome. Rs (crore) (a) Net Domestic Product at factor cost 8,000 (b) Net Factor Income from abroad 200 (c) Undisbursed Profit 1,000 (d) Corporate Tax 500 (e) Interest Received by Households 1,500 (f) Interest Paid by Households 1,200 (g) Transfer Income 300 (h) Personal Tax 500
The liability of a shareholder in a company is limited to the extent of the _________ of shares
A shopkeeper gives 11% discount on a television set, hence the cost price of it is Rs. 22,250. Then find the marked price of the television set.
_____ balance of statement of profit and loss shall be shown as a negative figure under ‘Surplus’ head.
In the case of the retail shop of medicines, the Profit on Sale of Building is to be shown under :
On 10th January, 2017, A sells goods to B for ₹ 12,000. On that date, B accepted a bill drawn upon him by A at two months for ₹ 12,000. A retains the bill till due date and on due date sends the bill to the Banker for collection. In due course, A receives the information from the Bank that the bill has been duly met.Pass Journal Entries in the books of A and B.
Mr Axe, one of the directors of XYZ Ltd, knew that bonus shares were to be announced in the next meeting and he expected the price to rise. He bought 10000 shares from the stock market. By the end of few months, price rose by Rs 9. He sold his shares and made huge profit. (i) Name the act of Mr Axe. (ii) Is it permitted ?
What is the treatment of goodwill in case of retirement of a partner ?
Ashish and Aakash are partners sharing profit in the ratio of 3 : 2. Their Capital Accounts showed a credit balance of ₹ 5,00,000 and ₹ 6,00,000 respectively as on 31st March, 2018 after debit of drawings during the year of ₹ 1,50,000 and ₹ 1,00,000 respectively. Net profit for the year ended 31st March was ₹ 5,00,000. Interest on capital is to be allowed 10% p.a.Pass the journal entry for interest on capital and prepare Profit and Loss Appropriation Account.

Discussion

No Comment Found

Related InterviewSolutions

Reply to Comment