What is meant by “Hidden Goodwill”? (C.B.S.E. 2017, Comptt.) Post category:Accountancy Reading time:1 mins read SOLUTION When the value of goodwill of the firm is not given but has to be inferred on the basis of net worth of the firm, it is called hidden goodwill. Please Share This Share this content Opens in a new window X Opens in a new window Facebook Opens in a new window Pinterest Opens in a new window LinkedIn Opens in a new window Viber Opens in a new window VK Opens in a new window Reddit Opens in a new window Tumblr Opens in a new window Viadeo Opens in a new window WhatsApp Read more articles Previous PostUnder what circumstances premium for goodwill paid by the incoming partner would never be recorded in the books of account? Next PostWhy should a new partner contribute towards goodwill on his admission? (C.B.S.E. 2017, Comptt.) You Might Also Like Ankur, Bhavna and Disha are partners in a firm. On 1st April, 2017, the balance in their Capital Accounts stood at Rs. 14,00,000, Rs. 6,00,000 and Rs. 4,00,000 respectively. They shared profits in the proportion of 7 : 3 : 2 respectively. Partners are entitled to interest on capital @ 6% per annum and salary to Bhavna @ Rs. 50,000 p.a. and a commission of Rs. 3,000 per month to Disha as per the provisions of the partnership Deed. Bhavna’s share of profit (excluding interest on capital) is guaranteed at not less than Rs. 1,70,000 p.a. Disha’s share of profit (including interest on capital but excluding commission) is guaranteed at not less than Rs. 1,50,000 p.a. Any deficiency arising on that account shall be met by Ankur. The profit of the firm for the year ended 31st March, 2018 amounted to Rs. 9,50,000. Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2018. July 22, 2022 Partnership Deed of C and D, who are equal partners, has a clause that any partner may retire from the firm on the following terms by giving a six-month notice in writing: The retiring partner shall be paid − (a) the amount standing to the credit of his Capital Account and Current Account. (b) his share of profit to the date of retirement, calculated on the basis of the average profit of the three preceding completed years. (c) half the amount of the goodwill of the firm calculated at 11/2 times the average profit of the three preceding completed years. C gave a notice on 31st March, 2017 to retire on 30th September, 2017, when the balance of his Capital Account was Rs. 6,000 and his Current Account (Dr.) Rs. 500. Profits for the three preceding completed years ended 31st March, were: 2015 − Rs. 2,800; 2016 − Rs. 2,200 and 2017 − Rs. 1,600. What amount is due to C as per the partnership agreement? August 3, 2022 XYZ Ltd. issued 5,000, 10% Debentures of Rs. 100 each on 1st April, 2015 at a discount of 10% redeemable at a premium of 10% after 4 years. Give journal entries for the year ended 31st March, 2016, assuming that the interest was payable half-yearly on 30th September and 31st March. Tax is to be deducted @ 10%. July 18, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.
Ankur, Bhavna and Disha are partners in a firm. On 1st April, 2017, the balance in their Capital Accounts stood at Rs. 14,00,000, Rs. 6,00,000 and Rs. 4,00,000 respectively. They shared profits in the proportion of 7 : 3 : 2 respectively. Partners are entitled to interest on capital @ 6% per annum and salary to Bhavna @ Rs. 50,000 p.a. and a commission of Rs. 3,000 per month to Disha as per the provisions of the partnership Deed. Bhavna’s share of profit (excluding interest on capital) is guaranteed at not less than Rs. 1,70,000 p.a. Disha’s share of profit (including interest on capital but excluding commission) is guaranteed at not less than Rs. 1,50,000 p.a. Any deficiency arising on that account shall be met by Ankur. The profit of the firm for the year ended 31st March, 2018 amounted to Rs. 9,50,000. Prepare Profit and Loss Appropriation Account for the year ended 31st March, 2018. July 22, 2022
Partnership Deed of C and D, who are equal partners, has a clause that any partner may retire from the firm on the following terms by giving a six-month notice in writing: The retiring partner shall be paid − (a) the amount standing to the credit of his Capital Account and Current Account. (b) his share of profit to the date of retirement, calculated on the basis of the average profit of the three preceding completed years. (c) half the amount of the goodwill of the firm calculated at 11/2 times the average profit of the three preceding completed years. C gave a notice on 31st March, 2017 to retire on 30th September, 2017, when the balance of his Capital Account was Rs. 6,000 and his Current Account (Dr.) Rs. 500. Profits for the three preceding completed years ended 31st March, were: 2015 − Rs. 2,800; 2016 − Rs. 2,200 and 2017 − Rs. 1,600. What amount is due to C as per the partnership agreement? August 3, 2022
XYZ Ltd. issued 5,000, 10% Debentures of Rs. 100 each on 1st April, 2015 at a discount of 10% redeemable at a premium of 10% after 4 years. Give journal entries for the year ended 31st March, 2016, assuming that the interest was payable half-yearly on 30th September and 31st March. Tax is to be deducted @ 10%. July 18, 2022