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Byju's Answer
Standard XII
Accountancy
Journal Entries for Recording Goodwill
When partners...
Question

When partners current accounts are prepared in partnership firms ?

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Solution

Dear student
Partner's Current account are prepared when partner's capitals are fixed. When partner's capitals are fixed, no changes can be made in capitals. Thus all the adjustments are to be made in partner's Current accounts.


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Q. If current accounts are not being managed for a partnership firm then partners are maintaining _______________ accounts.
Q. Ashok, Babu and Chetan are in partnership sharing profit in the proportion of 1/2, 1/3, 1/6 respectively. They dissolve the partnership of the 31st March, 2019 when the Balance Sheet of the firm as under:
Liabilities Amount
(₹)		 Assets Amount
(₹)
Sundry Creditors 20,000 Bank 7,500
Bills Payable 25,500 Sundry Debtors 58,000
Babu's Loan 30,000 Stock 39,500
Capital A/cs: Machinery 48,000
Ashok 70,000 Investments 42,000
Babu 55,000 Freehold Property 50,500
Chetan 27,000 1,52,000
Current A/cs:
Ashok 10,000
Babu 5,000
Chetan 3,000 18,000
2,45,500 2,45,500

The Machinery was taken over by Babu for ₹ 45,000, Ashok took over the Investments for ₹ 40,000 and Freehold property took over by Chetan at ₹ 55,000. The remaining Assets realised as follows:
Sundry Debtors ₹ 56,500 and Stock ₹ 36,500. Sundry Creditors were settled at discount of 7%. A Office computer, not shown in the books of accounts realised ₹ 9,000. Realisation expenses amounted to ₹ 3,000.
Prepare Realisation Account, Partners' Capital Accounts and Bank Account.
Q. In dissolution of partnership, _________ account is created, whereas _________ account is prepared in dissolution of firm.
Q.

Goodwill brought in by the incoming partner in cash for joining in a partnership firm is adjusted by giving affect to old partners capital accounts in:


Q. Partners current accounts are opened when their capital accounts are ___________ .

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