Admission of a Partner Test

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Admission of a Partner Test - 43

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Weekly Quiz Competition

Question 1
1 / -0

The profits for the last three years are: 2002-03 Rs 42,500; 2003-04 Profits Rs 56,000 and 2004-05 Profits Rs 68,000. The total liabilities of the firm are Rs 10,00,000 of which outsiders' liabilities Rs 5,00,000. The rate of interest expected from capital invested is 10%. Calculate the value of goodwill on capitalisation basis taking weighted average of Net Profit.

A
Rs 97,000

B
Rs 97,250

C
Rs 97,500

D
Rs 97,750

Solution
Question 2
1 / -0

When a goodwill account is raised at the time of admission of a new partner, credit is given to old partners in their__________.

A
new profit sharing ratio

B
old profit sharing ratio

C
ratio of sacrifice

D
capital ratio
Question 3
1 / -0

The capital of B and D are! 90,000 and! 30,000 respectively with the profit sharing ratio 3 : 1. They decide to change the ratio to 5 : 3. On the date of change Goodwill is valued at! 84,000. B and Ds capital will be credited by _________.

A
$$63,000$$ and $$21,000$$

B
$$50,000$$ and $$34,000$$

C
$$52,500$$ and $$31,500$$

D
$$60,000$$ and $$24,000$$

Solution

In case of a change in profit sharing ratio, the value of goodwill should be determined and preferably adjusted through capital accounts of the partners.
For the adjustment of goodwill, it is first raised in old ratio of partners and then write-off in new ratio.
Therefore, on the date of change in profit sharing ratio, goodwill alued at Rs. 84000 credited to B and D's capital account is -
B's capital account = Rs. 84000 * (3/4) = Rs. 63000
D's capital account = Rs. 84000 * (1/4) = Rs. 21000
Question 4
1 / -0

Which of the following statements is true?

A
In case of separate sets of books method of Joint Venture, co-venturers contribution of goods is debited in Joint Bank Account

B
Co-venturers contribution in cash is debited in Venturers personal account

C
Discount on discounting of BIR is debited to Venturers personal account

D
Contract money received is credited to Joint Venture account.
Question 5
1 / -0

Suresh consigned 2,000 pieces of goods to his agent costing 30 each an invoice price of 20% over cost price. 4/5th of the goods were sold by Agent at a profit margin of 25% on his cost. Sale value of goods will be _________.

A
$$Rs.90,000$$

B
$$Rs.60,000$$

C
$$Rs.72,000$$

D
$$Rs.75,000$$

Solution

Goods consigned to agent by suresh = 2000 pieces
Cost of goods consigned = 2000 pieces @ Rs. 30 each = Rs. 60000
Value of goods consigned to agent = Cost + 20% = Rs. 60000 + 20%
= Rs. 72000
Cost of goods consigned for agent = Value of goods consigned to agent for suresh = Rs. 72000
Cost of goods consigned for agent per piece = Rs. 72000 / 2000 pieces
= Rs. 36
Goods sold by agent = 2000 pieces * (4/5) = 1600 pieces
Sales value of goods sold by agent = (1600 Pieces * Rs. 36) + 25%
Sales value of goods sold by agent = Rs. 72000
Question 6
1 / -0

When an incoming partner purchases his share from one of the existing partners:

A
The total assets of the firm do not change

B
The assets of the firm will be augmented to the extent of the payment received from the new partner

C
The total assets of the firm will be reduced if the existing partner withdraw the share surrendered

D
The changes in the total assets of the firm will depend upon the structure of the assets
Question 7
1 / -0

Firm has earned exceptionally high profits from a contract which will not be renewed. In such a case, the profit from this contract will not be included in:

A
Profit share of the partners

B
Calculation of the goodwill

C
Both (a) and (b)

D
None of these

Solution

Goodwill is calculated on the basis of ordinary profits from operations of the business arising in the normal course.
Any abnormal gain or loss that is not generated from the ordinary business operations, is infrequent in nature, and is unlikely to recur in the foreseeable future is excluded from the calculation of goodwill.
Question 8
1 / -0

In the absence of any agreement, it is presumed that the new partner acquires his share in profits from the old partners in the:

A
New ratio

B
Old ratio

C
Sacrificing ratio

D
Gaining ratio

Solution

As per Indian Partnership Act 1932, In the absence of any information regarding the acquisition of share in profit of the retiring / deceased partner by the remaining partners. It is assumed that they will acquires his/her shares in the old profit sharing ratio.
Therefore, B is the correct option,
Question 9
1 / -0

All accumulated profits and losses are written off among all partners in the___________.

A
new profit-sharing ratio

B
old profit-sharing ratio

C
sacrificing ratio

D
gaining ratio
Question 10
1 / -0

X and Y are partners sharing profits in the ratio of $$1 : 1$$. They admit Z for $$1/5^{th}$$ share who contributed $$Rs. 50,000$$ for his share of goodwill. The total value of the goodwill of the firm will be ________.

A
$$Rs. 50,000$$

B
$$Rs. 1,00,000$$

C
$$Rs. 2,00,000$$

D
$$Rs. 2,50,000$$

Solution

Value of goodwill of the firm= Z's contribution for goodwill x 5/1
= Rs. 50000 x 5
= Rs. 250000
Therefore, D is the correct answer.

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Re-Attempt Weekly Quiz Competition

Admission of a Partner Test - 43

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Admission of a Partner Test - 43

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SHARING IS CARING

Question 1

Rs 97,000

Rs 97,250

Rs 97,500

Rs 97,750

Solution

Question 2

new profit sharing ratio

old profit sharing ratio

ratio of sacrifice

capital ratio

Question 3

$$63,000$$ and $$21,000$$

$$50,000$$ and $$34,000$$

$$52,500$$ and $$31,500$$

$$60,000$$ and $$24,000$$

Solution

Question 4

In case of separate sets of books method of Joint Venture, co-venturers contribution of goods is debited in Joint Bank Account

Co-venturers contribution in cash is debited in Venturers personal account

Discount on discounting of BIR is debited to Venturers personal account

Contract money received is credited to Joint Venture account.

Question 5

$$Rs.90,000$$

$$Rs.60,000$$

$$Rs.72,000$$

$$Rs.75,000$$

Solution

Question 6

The total assets of the firm do not change

The assets of the firm will be augmented to the extent of the payment received from the new partner

The total assets of the firm will be reduced if the existing partner withdraw the share surrendered

The changes in the total assets of the firm will depend upon the structure of the assets

Question 7

Profit share of the partners

Calculation of the goodwill

Both (a) and (b)

None of these

Solution

Question 8

New ratio

Old ratio

Sacrificing ratio

Gaining ratio

Solution

Question 9

new profit-sharing ratio

old profit-sharing ratio

sacrificing ratio

gaining ratio

Question 10

$$Rs. 50,000$$

$$Rs. 1,00,000$$

$$Rs. 2,00,000$$

$$Rs. 2,50,000$$

Solution

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