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Change in profit sharing ratioWhen there is a change in profit sharing ratio, it means that some of the partners will get higher profits based on the new ratios in the future while others will loose or will get lower profits.Those who will get higher profits therefore need to pay for the higher profits whereas those who will get lower profits thus need to be compensated for the reduction in their profit share.To achieve this objective, goodwill is normally introduced in the accounts by crediting the partners capital accounts according to their old profit sharing ratio (PSR) and written off again by debiting the partners capital accounts according to their new PSR.
Q. Define Constant working capital? The supposition of constant working capital should be investigated. Net working capital is probable to increase in line with sales and so ad
Q. Evaluate Weighted average cost of capital? As the investment is an extension of existing activities the risk of the investment will be estimated using the company's current
can a company reissue a share at discount which was earlier issued at discount
A village ordered supplies for its Fire Department at an estimated cost of $16,700. The supplies were received with an invoice for $16,800. The village accepted the shipment and th
HOW TO CALCULATE SINKING FUND METHOD
1. You can buy any quantity of cooking oil at $5 per litre and any quantity of flour at $2 per kilo. You have allocated $20 to spend on cooking oil and flour. (a) If you choo
EXECUTORSHIP Executorship is the body of statute law, case law and practice concerning the management of the estate of a deceased person. In what follows, we shall express the
Equation illustrates the relationship in between PVA n , A, K and n. So manipulating this a bit: We find that A = PVA n [(k (1 + k) n )/((1 +k) n - 1)] [(k (1 + k) n )/(
assess the risk of material misstatement at assertion level
How to calculate fair value of long-lived asset when the information about fair value is not available?
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