If some goodwill already exists in the books and the new partner brings in his share of goodwill in cash, how will you deal with existing amount of goodwill?
If some goodwill already exists in the books of old firm, then it should be written off among the old partner's itself in their old profit sharing raito. Following journal entry shall be passed for this:
Old Partner's Capital Account Dr.
To Goodwill Account
(Goodwill Written off in old ratio among the old partners)
What is Capital Fund? How is it calculated?
What is sacrificing ratio? Why is it calculated?
If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?
Why there is need for the revaluation of assets and liabilities on the admission of a partner?
What is subscription? How is it calculated?
List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating.
Why is Profit and Loss Adjustment Account prepared? Explain.
Why it is considered desirable to make the partnership agreement in writing.
On what occasions sacrificing ratio is used?
Identify various matters that need adjustments at the time of admission of a new partner.
What steps are taken to prepare Income and Expenditure Account from a Receipt and Payment Account?
What is sacrificing ratio? Why is it calculated?
Explain the process dissolution of partnership firm?
If a fixed amount is withdrawn on the first day of every quarter, for what period the interest on total amount withdrawn will be calculated?
Give two circumstances under which the fixed capitals of partners may change.
State the difference between dissolution of partnership and dissolution of partnership firm.
Reproduce the format of Realisation Account.
List the items which may be debited or credited in capital accounts of the partners when:
(i) Capitals are fixed.
(ii) Capital are fluctuating.
How deficiency of crditors is paid off at the time of dissolution of firm.
Why there is need for the revaluation of assets and liabilities on the admission of a partner?