death of a partner topic test
this one of the questions from the topic test, it says goodwill is to be calculated on the basis of 5 years but figures for only 4 years are given and when calculated on the basis of 4 years [ assuming its a typo] the solution is inconsistent,,, pls help!! heres the question
Ram, Sita, and Lakshman are partners in a firm that is engaged in the business of making bottles. Before the lockdown, their business was promising, and they didn't need to worry about raw materials as they had long-term contracts with suppliers to get them at cheaper rates. However, after the lockdown, the cost of raw materials rose as well and labour was not available even at a high wage rate. On 30th June, 2024, Sita died.
They were sharing profits and losses in the ratio of 7:8:5. Balance sheet of the firm as at 31st March 2024 was as follows :
| Liabilites | ₹ | Assets | ₹ |
|---|---|---|---|
| Investment Fluctuation Fund | 60,000 | Builiding | 1,30,000 |
| Creditors | 80,000 | Machinery | 1,50,000 |
| Bills payable | 50,000 | Motor vehicles | 90,000 |
| General Reserve | 60,000 | Furniture | 45,000 |
| Capital : |
Ram: 2,40,000
Sita: 2,10,000
Lakshman: 1,80,000 | 6,30,000 | Debtors | 1,20,000 | | | | Stock | 60,000 | | | | Investment | 1,80,000 | | | | Bills Recivable | 30,000 | | | | Bank | 15,000 | | | | Profit and Loss A/c | 60,000 | | | | | | | | 8,80,000 | | 8,80,000 |
According to the partnership deed, in addition to the deceased partner's captial, the executors are entitled to the following:
(i) Goodwill is to be valued at 3 years' purchase of the average profit of the last five years ended 31st March, which were:
2020 = ₹40,000
2021 = ₹60,000
2022 = ₹80,000
2023 = ₹90,000
(ii) Sita's share of goodwill be adjusted against the Capital Accounts of continuing partners Ram and Lakshman who have decided to share future profits in the ratio of 3:2.
(iii) Stock was found undervalued by 20%; Motor Vehicles were revalued at 80% and Furniture at ₹35,000.
(iv) Market Value of Investment is ₹1,60,000.
(v) Sita's share of profit or loss up to the date of death on the basis of average profit of the last four years.
The first image says it is the partnership act the second image says it is the comapnies act which empowers the central governemnt??
Partnership act has nothing to do with this right?, co.s act gives no of partners which is 100
As far as I know, Debentures issued as collateral security are NEVER shown in the balance sheet. Either ommited completely or either first the 6,00,000 amt is added to the Debenture head and a deduction named debenture suspense is made from it leaving the net amt under the Debenture head to be NIL. Is this a mistake or am i missing smth?
cuet is approaching and im shit scareddddd ab srcc kaise milega mujhe. how do i score 300/250 and air 1. havent even completed the syllabus, ek PURA chapter bacha haii!!!!! woh bhi ANALYSIS OF FINANCIAL STATEMENTS!!!!!! sabse bada chapter ffs.... ghar walo ne bola hai agar srcc nhi hua toh ghar se nikal denge (insert wilted rose). please yawrrr koi tips dedooo. also i forgot to mention, mai 2027 me likh raha hu toh aur kam time haiiiiii. kaash 10th se hi prep shuru ki hoti...