Question : P, Q and R were partners. Their partnership deed provided that they were to share profits thus; P 26 per cent; Q 34 per cent; R 40 per cent; and that if a partner died, his capital should remain in the business for a stated period at a fixed rate of interest, but that the deceased partner’s share should be credited with an amount for Goodwill, based upon one and a half year’s average profits, for the five years prior to his death, but be subject to deduction of 5 per cent from the book debts. R died, and the profits of the firm for five years were agreed at Rs.20,000; Rs.30,000; Rs. 15,000 (loss); Rs.5,000 (loss); and Rs.45,000 respectively. Book Debts stood at Rs.90,000. Q. R’s Capital Account will be credited with______________.
Option 1: Rs 18,000
Option 2: Rs 22,500
Option 3: Rs 7200
Option 4: Rs 14,500
Correct Answer: Rs 7200
Solution : Answer = Rs 7200
R’s Capital Account will be credited with Rs.7,200
Total profit = 20,000 + 30,000 + (-15000) + (-5000) + 45000 = 75000
Average profit = 75000/ 5 = 15000
Goodwill = 15000 x 1.5 = 22500
Net Goodwill = 22,500 - 4,500 (5% of Book Debts) = Rs. 18,000 R ’s Share = 18,000 × 40%= Rs.7,200 Hence, the correct option is 3.
Question : P , Q and R were partners. Their partnership deed provided that they were to share profits thus; P 26 per cent; Q 34 per cent; R 40 per cent; and that if a partner died, his capital should remain in the business for a stated period at a fixed rate of interest, but
Question : P, Q and R were partners. Their partnership deed provided that they were to share profits thus; P 26 per cent; Q 34 per cent; R 40 per cent; and that if a partner died, his capital should remain in the business for a stated period at a fixed rate of interest, but
Question : P Q and R are partners sharing profit and losses in the ratio of 5:3:2. R retires and goodwill is valued at Rs 80,000. Adjustments for goodwill will be
Question :
R, M and P were partners in a firm. P died on 29th February, 2020. His share of profit from the closure of the last accounting year till the date of death was to be calculated on the basis of the average of three completed years of profits
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