Illustration of change in profit sharing ratio, Financial Accounting

Illustration of change in profit sharing ratio

A, B and C have been trading as equal partners having capital contributions of £400,000, £300,000 and £200,000 respectively. They deaded to change their profit sharing ratio to 3:2:1. Goodwill was agreed at £150,000.

Required:

Prepare their capital accounts to show their new capital balances assuming that goodwill in not to be retained in the accounts.

Capital account

 

A

B

C

 

A

B

C

Goodwill

75,000

50,000

25,000

Bal. b/d

400,000

300,000

200,000

Bal. c/d

375,000

300,000

225,000

Goodwill

  50,000

  50,000

  50,000

 

450,000

350,000

250,000

 

450,000

350,000

250,000

Posted Date: 12/11/2012 6:08:35 AM | Location : United States







Related Discussions:- Illustration of change in profit sharing ratio, Assignment Help, Ask Question on Illustration of change in profit sharing ratio, Get Answer, Expert's Help, Illustration of change in profit sharing ratio Discussions

Write discussion on Illustration of change in profit sharing ratio
Your posts are moderated
Related Questions
Q. Show example of Internal rate of return? IRR (Internal rate of return) is a discounted cash flow investment appraisal method that calculates the discount rate which causes th

Sales volume reaches the maximum capacity of the new machine in Year 4. The positive NPV point to that the investment in Machine Two is financially acceptable althoug

1. The acceptance of a capital budgeting project is usually evaluated on its own merits. That is, capital budgeting decisions are treated separately from capital structure decision

Sleek Ride, a company providing limo services, has a December 31 year-end date. For Sleek Ride, the following transactions occurred during the ?rst 10 days of June: a. Purchased, o


Question : The subsequent data pertain to a shop. The owner has made following sales forecasts for the first 5 months of the coming year.

SE CTION A QUESTION 1: Below is a trial balance of a manufacturer of boots for the local market. Trial balance as at 31st December 2012 Dr Rs

Temporary or Timing differences Temporary/timing differences relate to those items that are adjusted in the current period and are again adjusted in subsequent financial period


Answer to Question Six   Summarised consolidated statement of comprehensive income for the A group for the year ended 30 September 2010 All workings