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प्रश्न
Answer in one sentence only.
What does the excess of debits over credits in profit and loss adjustment account indicate?
उत्तर
The excess of debits over credits in Profit and Loss Adjustment Account indicates the amount of net loss that needs to be shared by the old partners in their old profit sharing ratio. This is done as the new partner is not liable for any losses due to the past activities of the old partners.
APPEARS IN
संबंधित प्रश्न
Abhijeet and Sujeet are partners sharing profits and losses in the ratio of `3/5` and `2/5`respectively. From the following trial balance and adjustments, prepare Trading, Profit and Loss Account for the year ended 31st March, 2010 and the Balance Sheet as on that date.
| Trial balance as on 31st march 2010 | |||
| Debit Balance | Amount (Rs) | Credit Balance | Amount (Rs) |
| Drawing accounts: | Capital accounts: | ||
| Abhijeet | 6,000 | Abhijeet | 1,32,000 |
| Sujeet | 4,000 | Sujeet | 88,000 |
| Land and building | 1,70,000 | Sales | 1,69,000 |
| Plant (Addition on 1.1.2010, Rs 20,000) | 90,000 | Sundry creditors | 81,900 |
| Opening stock | 44,000 | Bank overdraft | 80,000 |
| Wages | 13,500 | Reserve for doubtful debts | 2,000 |
| Cash at bank | 6,500 | Outstanding expenses | 4,600 |
| Sundry debtors | 69,200 | Sundry income | 4,000 |
| Purchases | 1,22,500 | Pre-received rent | 5,000 |
| Carriage | 2,100 | 10% Bank loan (Taken on 1st Oct., 2009) | 32,000 |
| Rent, rates and insurance | 4,500 | ||
| Furniture | 50,000 | ||
| Salaries | 7,600 | ||
| Bad debts | 3,200 | ||
| Office expenses | 5,400 | ||
| 5,98,500 | 5,98,500 | ||
- Closing stock was valued at cost Rs 34,000 and at market price Rs 40,000.
- Depreciate plant @ 10% p. a.
- Insurance was prepaid Rs 600.
- Office expenses include personal expenses of Sujeet Rs 800.
- Maintain R.D.D. at 5% on sundry debtors.
Answer in one sentence only.
What is meant by admission of partner?
Answer in one sentence only.
In what proportion is general reserve distributed amongst the old partners?
Write the word/term or phrase which can substitute the following statement.
Excess actual capital over proportionate capital.
Write the word/term or phrase which can substitute the following statement.
Profit and Loss Account appearing on the asset side of a balance sheet.
Write the word/term or phrase which can substitute the following statement.
Change in the relationship between the partners.
Anuj and Eeshan are two partners sharing profits and losses in the ratio of 3:2. They decided to admit Aaroh for 1/5th share, the new profit sharing ratio will be ____________
Write a word/phrase/term which can substitute the following statement.
The ratio in which general reserve is distributed to the old partners.
Write a word/phrase/term which can substitute the following statement.
Capital employed × NRR/100 =
State True or False with reason.
A new partner can bring capital in cash or kind.
State True or False with reason.
The gain ratio is calculated at the time of admission of a partner.
State True or False with reason.
The new ratio minus old ratio is equal to the sacrifice ratio.
State True or False with reason.
Usually, when a new partner is admitted to the firm there will be an increase in the capital of the firm.
What is the sacrifice ratio?
What is the treatment of accumulated profits at the time of admission of a partner?
Excess of proportionate capital over actual capital represents _________.
Which of the following statements is not true in relation to the admission of a partner?
Raj and Rashmi shared profits and losses in the ratio of 3: 2 respectively. Their Balance Sheet as on 31st March 2020 was as under:
Balance sheet as on 31st March, 2020
| Liabilities | Amount (₹) | Assets | Amount (₹) |
| Sundry Creditors | 90,000 | Cash at Bank | 1,500 |
| General Reserve | 60,000 | Sundry Debtors | 1,33,500 |
| Capital: |
51,000 |
||
| Raj | 2,16,000 | Investment | 72,000 |
| Rashmi | 1,44,000 | Plant | 1,80,000 |
| Building | 72,000 | ||
| 5,10,000 | 5,10,000 |
They admit Hiren into partnership on 1-4-2020. The terms being that:
(1) He shall have to bring in ₹ 1,20,000 as his Capital for 1/4 share in future profits.
(2) Value of Goodwill of the firm is to be fixed at the average profits for the last three years.
The Profit were:
| 2016 - 17 | ₹ 96,000 |
| 2017 - 18 | ₹ 1,62,000 |
| 2018 - 19 | ₹ 1,47,000 |
Hiren is unable to bring the value of the Goodwill in cash. It is decided to raise the Goodwill in the books of accounts.
(3) Reserve for doubtful debts is to be created at ₹ 3,000.
(4) Closing stock is valued at ₹ 45,000.
(5) Plant and Building is to be depreciated by 5%.
Prepare Profit and Loss Adjustment A/c, Capital Accounts of Partners and Balance Sheet of the new firm.
Write a word/term/phrase as a substitute for the following statement:
Old Ratio less New Ratio.
Answer in one sentence.
What is sacrifice ratio?
Answer in one sentense.
What is sacrifice ratio?
Answer in one sentence.
What is the sacrifice ratio?
Answer in one sentence.
What is the sacrifice ratio?
Do you agree or disagree with the following statements:
Gain ratio means profit share given up by the retiring partner.
Moksh and Aarav share profits and losses in the ratio 3 : 2 in partnership firm. Their Balance Sheet as on 31st March, 2023 was as under:
| Balance Sheet as on 31st March, 2023 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Creditors | 75,000 | Bank | 45,000 | ||
| Bills payable | 60,000 | Bills receivable | 22,800 | ||
| Bank loans | 96,000 | Debtors | 1,24,800 | 1,20,000 | |
| General reserve | 15,000 | Less : R.D.D | 4,800 | ||
| Capitals: | Stock | 72,000 | |||
| Moksh | 90,000 | 1,62,000 | Furniture | 28,200 | |
| Aarav | 72,000 | Machinery | 30,000 | ||
| Building | 90,000 | ||||
| 4,08,000 | 4,08,000 | ||||
On 1-04-2023, they admitted Tithi on the following terms:
(1) For 112 shares in profits in future, Tithi should bring ₹ 60,000 for capital and ₹ 30,000 for goodwill in cash.
(2) Half of amount of goodwill is withdrawn by old partners.
(3) The Stock is to be depreciated by 10% and Machinery by 5%.
(4) R.D.D. is to be maintained at ₹ 6,000.
(5) Furniture should be appreciated to ₹ 32,100 and Building be appreciated by 20%.
Pass the necessary journal entries in the books of the firm.
Jainam and Moksh are equal partners in the business. Their Balance Sheet as on 31st March, 2023 stood as under:
| Balance Sheet as on 31st March, 2023 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Sundry Creditor | 1,35,000 | Cash in Bank | 93,000 | ||
| Capitals: | Debtors | 46,500 | 45,000 | ||
| Jain am | 67,500 | 1,12,500 | Less: R.D.D | 1,500 | |
| Moksh | 45,000 | Building | 82,500 | ||
| General Reserve | 27,000 | Machinery | 36,000 | ||
| Bills Receivable | 18,000 | ||||
| 2,74,500 | 2,74,500 | ||||
They decided to admit Prem on 1st April, 2023 on the following terms:
(1) The Machinery and Building be depreciated by 10%. Reserve for Doubtful debts to be increased by ₹ 7,500.
(2) Bills receivable are taken over by Jainam at the discount of 10%.
(3) Prem should bring ₹ 90,000 as capital for his I/4th share in future profits.
(4) The capital accounts of all the partners be adjusted in proportioning in the new profit sharing ratio by opening current accounts of the partners.
Prepare Profit and Loss Adjustment A/c, Partners' Capital A/c and Balance Sheet of new firm.
Sacrifice ratio = ______ - ______
Hemant and Shiva were in partnership sharing profits and losses in the ratio of 3 : 1.
| Balance Sheet as on 31st March, 2023 | |||||
| Liabilities | Amount (₹) | Amount (₹) | Assets | Amount (₹) | Amount (₹) |
| Creditors | 84,000 | Land and Building | 52,500 | ||
| General Reserve | 8,400 | Furniture | 4,200 | ||
| Capital A/cs: | Stock | 42,000 | |||
| Hemant | 63,000 | 96,600 | Debtors | 42,000 | |
| Shiva | 33,600 | Bills Receivable | 27,300 | ||
| Cash at Bank | 21,000 | ||||
| 1,89,000 | 1,89,000 | ||||
They decided to admit Aum on 1st April, 2023 on the following terms:
(1) He should be given I/5th share in profit and for that he brought in ₹ 42,000 as capital through RTGS.
(2) Goodwill should be raised at ₹ 42,000.
(3) Appreciate Land and Building by 20%.
(4) Furniture and Stock are to be depreciated by 10%.
(5) The capitals of all partners should be adjusted in their new profit sharing ratio through Bank A/c.
Prepare necessary accounts and Balance Sheet of new firm.
Answer in one sentence.
What is sacrifice ratio?
Answer in one sentence.
What is sacrifice ratio?
What is the sacrifice ratio?
Answer in one sentence.
What is sacrifice ratio?
Answer in one sentence.
What is sacrifice ratio?
Answer in one sentence.
What is sacrifice ratio?
Answer in one sentence.
What is sacrifice ratio?
Answer in one sentence.
What is sacrifice ratio?
