Homework Help is Here – Start Your Trial Now!
Business
Accounting
A, Band Care partners sharing profits in the ratio of 3: 2:1. D is admitted for 1/6th share and he brings $ 15,000 as capital. Goodwill appears in the books of old firm at $ 30,000. Goodwill at the time of D's admission is to be

A, Band Care partners sharing profits in the ratio of 3: 2:1. D is admitted for 1/6th share and he brings $ 15,000 as capital. Goodwill appears in the books of old firm at $ 30,000. Goodwill at the time of D's admission is to be

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
See similar textbooks
icon
Related questions
Question
A, Band Care partners sharing profits in the ratio of 3: 2:1. D is admitted for 1/6th share and he brings $ 15,000 as capital. Goodwill appears in the books of old firm at $ 30,000. Goodwill at the time of D's admission is to be calculated at 3 years' purchase of average profits of last 3 years. Profits for the last three years were $ 10,000, $ 15,000, $ 20,000 respectively. Give the necessary journal entries.
Transcribed Image Text:A, Band Care partners sharing profits in the ratio of 3: 2:1. D is admitted for 1/6th share and he brings $ 15,000 as capital. Goodwill appears in the books of old firm at $ 30,000. Goodwill at the time of D's admission is to be calculated at 3 years' purchase of average profits of last 3 years. Profits for the last three years were $ 10,000, $ 15,000, $ 20,000 respectively. Give the necessary journal entries.
Expert Solution
steps

Step by step

Solved in 2 steps

SEE SOLUTIONCheck out a sample Q&A here
Blurred answer
Knowledge Booster
Partners and Partnerships
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education
SEE MORE TEXTBOOKS