Explain how is goodwill treated in the books of accounts

Reference no: EM132152818

Accountancy Assignment -

Attempt all the questions.

1. Explain how is goodwill treated in the books of accounts when the incoming partner does not bring his share of goodwill in cash. What journal entries are to be passed when asset and liabilities are revaluated at the time of admission of a new partner?

2. The Delhi Cloth Mills LTD. Invited applications for 10,000 Shares of Rs. 100 each at a premium of Rs. 10 each payable as below:

Rs. 50 on Application

Rs. 35 on Allotment (including premium) and

Rs. 25 on Call

Application for 15,000 shares were received. Application for 2,500 shares did not get any allotment and their money was returned. Allotment was made pro-data to the remaining applicants.

Mr. A was allotted 400 shares. He failed to pay the amount due on allotment and call money. The company forfeited his shares and subsequently re-issued at Rs.105 per share. Show the journal and Cash Book entries in the books of the company and also prepare the Balance sheet.

3. A Calcutta Head Office charges out goods supplied to its branch at cost plus 20 per cent. From the following particulars, prepare the Branch Account and Branch Debtors Account in the Head Office books:

	Rs.
Goods sent to Branch	2,11,872
Total Sales	2.06,400
Cash Sales	1,10,400
Cash received from Branch Debtors	88,000
Branch Debtors at commencement	44,000
Branch Stock at commencement	7,680
Branch Stock at close of the period	13,440

Reference no: EM132152818

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