Why inventory is excluded from liquid assets? Post category:Accountancy Reading time:1 mins read SOLUTION Inventory is excluded from liquid assets because:(i) there is uncertainty whether it will be sold or not and at what price it will be sold; (ii) it will take time before it is converted into trade receivables and cash. Please Share This Share this content Opens in a new window Twitter Opens in a new window Facebook Opens in a new window Google+ 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 PostState one transaction which results in an increase in ‘Liquid Ratio’ and no change in ‘Current Ratio’. Next PostWhy prepaid expenses are considered as Current assets? You Might Also Like Gold and Silver are partners sharing profits and losses in the ratio of 2: 5. They admit Copper on the condition that he will bring Rs. 14,000 as his share of goodwill to be distributed between Gold and Silver. Copper’s share in the future profits or losses will be 1 / 4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by copper will be received by Gold and Silver? November 2, 2022 Kavita, Leena and Monica are partners in firm sharing profits in the ratio of 1: 1: 3 respectively. Their Capital Accounts showed the following balances on 31st March, 2012: Kavita Rs. 70,000; Leena Rs. 65,000 and Monica Rs. 2,10,000. Firm closes its accounts every year on 31st March. Kavita died on 30th September, 2012. In the event of death of any partner, the Partnership Deed provides for the following: (a) Interest on capital will be calculated at the rate of 6% p.a. (b) The deceased partner’s share in the goodwill of the firm will be calculated on the basis of 2 years’ purchase of the average profit of last three years. The profits of the firm for the last three years were Rs. 90,000; Rs. 1,00,000 and Rs. 1,10,000 respectively. (c) Her share in the Reserve Fund of the firm will be paid. The Reserve Fund of the firm was Rs. 60,000 at the time of Kavita’s death. (d) Her share of profit till the date of death will be calculated on the basis of sales. It is also specified that the sales during the year 2011-12 were Rs. 20,00,000. The sales from 1st April, 2012 to 30th September, 2012 were Rs. 4,00,000. The profit of the firm for the year ending 31st March, 2012 was Rs. 2,00,000. Prepare Kavita’s Capital Account to be presented to his legal representative. August 5, 2022 What is meant by reconstitution of partnership firm? September 26, 2022 Leave a Reply Cancel replyYou must be logged in to post a comment.
Gold and Silver are partners sharing profits and losses in the ratio of 2: 5. They admit Copper on the condition that he will bring Rs. 14,000 as his share of goodwill to be distributed between Gold and Silver. Copper’s share in the future profits or losses will be 1 / 4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by copper will be received by Gold and Silver? November 2, 2022
Kavita, Leena and Monica are partners in firm sharing profits in the ratio of 1: 1: 3 respectively. Their Capital Accounts showed the following balances on 31st March, 2012: Kavita Rs. 70,000; Leena Rs. 65,000 and Monica Rs. 2,10,000. Firm closes its accounts every year on 31st March. Kavita died on 30th September, 2012. In the event of death of any partner, the Partnership Deed provides for the following: (a) Interest on capital will be calculated at the rate of 6% p.a. (b) The deceased partner’s share in the goodwill of the firm will be calculated on the basis of 2 years’ purchase of the average profit of last three years. The profits of the firm for the last three years were Rs. 90,000; Rs. 1,00,000 and Rs. 1,10,000 respectively. (c) Her share in the Reserve Fund of the firm will be paid. The Reserve Fund of the firm was Rs. 60,000 at the time of Kavita’s death. (d) Her share of profit till the date of death will be calculated on the basis of sales. It is also specified that the sales during the year 2011-12 were Rs. 20,00,000. The sales from 1st April, 2012 to 30th September, 2012 were Rs. 4,00,000. The profit of the firm for the year ending 31st March, 2012 was Rs. 2,00,000. Prepare Kavita’s Capital Account to be presented to his legal representative. August 5, 2022