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Mr. B and Mr. E are partners sharing Profits and Losses in the ratio of 3 : 2. On 30th September, 2014 they admit Mr. C as a partner, and the new profit ratio is 2:2:1. C brought in Fixture $ 3,000 and cash $ 10,000, the goodwill being (i) B and E $ 20,000 and (ii) C$ 10,000 but neither figure is to be brought into the books. On 31s* March, 2015, the partnership is dissolved, B retiring and the other two partners forming a company called BC Limited with equal capitals, taking over all remaining assets and liabilities, goodwill being agreed at $ 40,000 and brought into books of the company. B agrees to take over the business car at $ 3,700 : Plant was sold for $ 3,000 being in excess of requirements. The profits of the two preceding years were $ 17,200 and $ 19,000 respectively and it was agreed that for the half year ended 30th September, 2014, the net profit was to be taken as equal to the average of the two preceding years and the current year. No entries had been made when Centered, except cash. No new book being opened by BC Company Ltd., B agreed to leave $ 50,000 as loan to the company, secured by 12% Debentures. Following is the Trial Balance as on 31s* March, 2015: Debit Credit $ Capital Accounts : в 35,000 20,000 10,000 E Drawings Accounts : B 6,000 5,000 2,800 31,000 23,000 7,000 2,700 13,000 16,300 E 12,000 Debtors & Creditors Plant (Book value of plant sold $ 4,000) Fixtures Motor Car Stock on 31st March, 2015 Bank Profit & Loss A/c for the year 29,800 1,06,800 1,06,800 Prepare : (1) Goodwill Adjustment Account; (2) Capital Accounts of Partners I||

Mr. B and Mr. E are partners sharing Profits and Losses in the ratio of 3 : 2. On 30th September, 2014 they admit Mr. C as a partner, and the new profit ratio is 2:2:1. C brought in Fixture $ 3,000 and cash $ 10,000, the goodwill being (i) B and E $ 20,000 and (ii) C$ 10,000 but neither figure is to be brought into the books. On 31s* March, 2015, the partnership is dissolved, B retiring and the other two partners forming a company called BC Limited with equal capitals, taking over all remaining assets and liabilities, goodwill being agreed at $ 40,000 and brought into books of the company. B agrees to take over the business car at $ 3,700 : Plant was sold for $ 3,000 being in excess of requirements. The profits of the two preceding years were $ 17,200 and $ 19,000 respectively and it was agreed that for the half year ended 30th September, 2014, the net profit was to be taken as equal to the average of the two preceding years and the current year. No entries had been made when Centered, except cash. No new book being opened by BC Company Ltd., B agreed to leave $ 50,000 as loan to the company, secured by 12% Debentures. Following is the Trial Balance as on 31s* March, 2015: Debit Credit $ Capital Accounts : в 35,000 20,000 10,000 E Drawings Accounts : B 6,000 5,000 2,800 31,000 23,000 7,000 2,700 13,000 16,300 E 12,000 Debtors & Creditors Plant (Book value of plant sold $ 4,000) Fixtures Motor Car Stock on 31st March, 2015 Bank Profit & Loss A/c for the year 29,800 1,06,800 1,06,800 Prepare : (1) Goodwill Adjustment Account; (2) Capital Accounts of Partners I||

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Mr. B and Mr. E are partners sharing Profits and Losses in the ratio of 3: 2. On 30th September, 2014 they admit Mr. Cas a partner, and the new profit ratio is 2:2:1. C brought in Fixture $ 3,000 and cash $ 10,000, the goodwill being (i) B and E$ 20,000 and (ii) C $ 10,000 but neither figure is to be brought into the books. On 31s* March, 2015, the partnership is dissolved, B retiring and the other two partners forming a company called BC Limited with equal capitals, taking over all remaining assets and liabilities, goodwill being agreed at $ 40,000 and brought into books of the company. B agrees to take over the business car at $ 3,700 : Plant was sold for $ 3,000 being in excess of requirements. The profits of the two preceding years were $ 17,200 and $ 19,000 respectively and it was agreed that for the half year ended 30th September, 2014, the net profit was to be taken as equal to the average of the two preceding years and the current year. No entries had been made when C entered, except cash. No new book being opened by BC Company Ltd., B agreed to leave $ 50,000 as loan to the company, secured by 12% Debentures. Following is the Trial Balance as on 31st March, 2015: Debit Credit $ Capital Accounts: в 35,000 20,000 10,000 E Drawings Accounts : B 6,000 5,000 2,800 31,000 23,000 7,000 2,700 13,000 16,300 E 12,000 Debtors & Creditors Plant (Book value of plant sold $ 4,000) Fixtures Motor Car Stock on 31st March, 2015 Bank Profit & Loss A/c for the year 29,800 1,06,800 1,06,800 Prepare : (1) Goodwill Adjustment Account ; (2) Capital Accounts of Partners·
Transcribed Image Text:Mr. B and Mr. E are partners sharing Profits and Losses in the ratio of 3: 2. On 30th September, 2014 they admit Mr. Cas a partner, and the new profit ratio is 2:2:1. C brought in Fixture $ 3,000 and cash $ 10,000, the goodwill being (i) B and E$ 20,000 and (ii) C $ 10,000 but neither figure is to be brought into the books. On 31s* March, 2015, the partnership is dissolved, B retiring and the other two partners forming a company called BC Limited with equal capitals, taking over all remaining assets and liabilities, goodwill being agreed at $ 40,000 and brought into books of the company. B agrees to take over the business car at $ 3,700 : Plant was sold for $ 3,000 being in excess of requirements. The profits of the two preceding years were $ 17,200 and $ 19,000 respectively and it was agreed that for the half year ended 30th September, 2014, the net profit was to be taken as equal to the average of the two preceding years and the current year. No entries had been made when C entered, except cash. No new book being opened by BC Company Ltd., B agreed to leave $ 50,000 as loan to the company, secured by 12% Debentures. Following is the Trial Balance as on 31st March, 2015: Debit Credit $ Capital Accounts: в 35,000 20,000 10,000 E Drawings Accounts : B 6,000 5,000 2,800 31,000 23,000 7,000 2,700 13,000 16,300 E 12,000 Debtors & Creditors Plant (Book value of plant sold $ 4,000) Fixtures Motor Car Stock on 31st March, 2015 Bank Profit & Loss A/c for the year 29,800 1,06,800 1,06,800 Prepare : (1) Goodwill Adjustment Account ; (2) Capital Accounts of Partners·
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