Illustration of change in profit sharing ratio, Financial Accounting

Assignment Help:

Illustration of change in profit sharing ratio

A, B and C have been trading as equal partners having capital contributions of £400,000, £300,000 and £200,000 respectively. They deaded to change their profit sharing ratio to 3:2:1. Goodwill was agreed at £150,000.

Required:
Prepare their capital accounts to show their new capital balances assuming that goodwill in not to be retained in the accounts.

Capital account
	A	B	C		A	B	C
Goodwill	75,000	50,000	25,000	Bal. b/d	400,000	300,000	200,000
Bal. c/d	375,000	300,000	225,000	Goodwill	50,000	50,000	50,000
	450,000	350,000	250,000		450,000	350,000	250,000

Related Discussions:- Illustration of change in profit sharing ratio

Determine the payback period for the project, An investment project require...

An investment project requires a net investment of $100,000. The project is expected to generate annual net cash inflows of $28,000 for the next 5 years. The firm's cost of capital

Journalize the transaction, received 16,000 contribution in exchange for co...

received 16,000 contribution in exchange for common stock

benefit-cost ratio, The city of Fredericton operates automobile parking fa...

The city of Fredericton operates automobile parking facilities and is evaluating a proposal to erect and operate a structure for parking in the city's downtown area. 2 designs for

Internal revenue service (irs), Explain:- Q.1 Explain the ways in which...

Explain:- Q.1 Explain the ways in which the needs of internal and external users of accounting information are the same and different. Q.2 Why is it important for financial sta

Antitrust laws, Antitrust Laws - Assignment Help One of the foundations...

Antitrust Laws - Assignment Help One of the foundations of business within the United States is the freedom to compete in the marketplace; however, certain laws have been creat

expected range of returns, Series Arithmetic Mean Standa...

Series Arithmetic Mean Standard Deviation Small-company stocks 15.9 % 32.8 % Large-company

Reconciliations, What is the best way of doing reconciliations of control a...

What is the best way of doing reconciliations of control accounts like Purchases Ledger Control vs Purchases Ledger and Sales Ledger Control vs Sales Ledger

A prior period adjustment, Q. A prior period adjustment that corrects incom...

Q. A prior period adjustment that corrects income of a prior period requires that an entry be made to a. an income statement account. b. a current year revenue or expense account.

Working Capital movement, If revenue=£92 million, purchase costs=£48 millio...

If revenue=£92 million, purchase costs=£48 million and operating costs=£41 million, and if working capital days are 39 for inventory and 110 for accounts payable, what is the worki

Prepare consolidated financial statements, Chambers plc imports household e...

Chambers plc imports household equipment from Germany. On 1 July 2011, the company acquired 60% of the ordinary shares of Court Ltd, which owns a chain of retail shops selling hous

Write Your Message!

Name

Email id

Message

Verfication Code

User Account

All Pages