Retirement of a partner class 12 practical problems 5 | chapter 4 book keeping & accountancy

SHALINI J KUSHWAHA { ALL STUDY }・2 minutes read

Partners analyze profit-sharing ratios and adjustments in the balance sheet, including goodwill calculations and removals, depreciation applications, and capital account transfers, resulting in a final balance of $33020. The retirement partner's pay, profit sharing discussions, and calculation accuracy are emphasized, with a reminder to study well and utilize provided resources for further assistance.

Insights

  • The retirement partner's question involves analyzing the profit sharing ratio between partners Savaloda and Flavor, including adjustments for goodwill, depreciation, and balance sheet items like Sanrio characters and Bills Pebble.
  • The process of removing goodwill from the balance sheet, calculating partner profits, and adjusting capital accounts is crucial in determining the final balance of $33020 and ensuring the accuracy of the financial statements.

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Recent questions

  • What adjustments are made in a partnership balance sheet?

    Adjustments in a partnership balance sheet include calculating average profit for goodwill, crediting goodwill to partners' capital accounts, applying depreciation to assets, and removing unnecessary items.

  • How is goodwill handled in a partnership balance sheet?

    Goodwill in a partnership balance sheet is calculated based on the average profit over a period, credited to partners' capital accounts, and not included in the final balance sheet to be returned off.

  • What is the process of return off in a partnership balance sheet?

    The return off process in a partnership balance sheet involves removing goodwill from the balance sheet before finalizing the accounts to ensure accurate representation of the partners' capital.

  • How are profits shared among partners in a partnership?

    Profits in a partnership are shared among partners based on their profit-sharing ratio, with each partner receiving their respective share of the total profit calculated after adjustments and goodwill considerations.

  • What is the importance of accurately calculating partner capital accounts in a partnership?

    Accurately calculating partner capital accounts in a partnership is crucial to ensure transparency, fairness, and proper distribution of profits among partners, reflecting the financial health and contributions of each partner to the business.

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Summary

00:00

"Retirement partner's profit sharing ratio analysis"

  • The retirement partner's last question, number five, is discussed in the video.
  • The question is found on page 186 of the textbook.
  • The question involves analyzing the profit sharing ratio between partners Savaloda and Flavor.
  • The balance sheet details liabilities like Sanrio characters, Bills Pebble, and capital, while assets include furniture and computers.
  • Adjustments include calculating the average profit over the last five years to determine goodwill.
  • Goodwill needs to be credited to the capital accounts of all partners.
  • Depreciation is applied to computers and furniture.
  • An adjustment involves removing an unnecessary item from the balance sheet.
  • Goodwill should not appear in the new balance sheet, as decided.
  • The retiring partner, Lodha, will have the amount payable transferred to his loan account.

15:13

Financial Calculations and Profit Sharing Among Partners

  • Profit is $2500, but mistakenly written as $2050.
  • A 20% appreciation leads to a profit of $35220.
  • Calculate the weight of Fata Fida Hussain in tons by adding 400 and 500 forces, totaling 90.
  • A profit of $5000 is achieved, increasing the value.
  • A profit of $1000 is obtained, leading to a profit-sharing discussion among partners.
  • Goodwill should not appear in the balance sheet, necessitating a return off.
  • The return off process involves removing goodwill from the balance sheet.
  • Calculation of goodwill in 2016 results in a rate of 2.1.
  • Partners share profits, with Tushar earning over $300 and Sa Lodha and Dholay each receiving $2010.
  • The total balance in partner capital accounts is calculated, with a final balance of $33020.

33:57

"Traveler: Chapters 1, 2, 4 Completed"

  • The sum of 1000 plus-20 75002 3704 50 is more than 180, confirming the correctness of the answer. The balance being Italian indicates the accuracy of the question's solution. Chapter one, two, and four of 'Traveler' have been completed, with a reminder to study well and ask any doubts. Join the Telegram channel for PDF solutions and quotes, preparing for a new chapter.
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