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  • Partnership (A)

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    amna zaman
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    Bill earned a salary of $12,000 and a profit share of $24,000 from a business with profits of $52,000. Ben also earned a profit share of $16,000. When the business earns goodwill due to the efforts of old partners, any benefit from goodwill on a partnership change is divided according to the old profit sharing ratios. Graham's share of a $8,650 loss was $3,460, which along with $26,000 in drawings, resulted in a $29,460 debit to Graham's current account.

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    Partnership (a)

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    Bill earned a salary of $12,000 and a profit share of $24,000 from a business with profits of $52,000. Ben also earned a profit share of $16,000. When the business earns goodwill due to the efforts of old partners, any benefit from goodwill on a partnership change is divided according to the old profit sharing ratios. Graham's share of a $8,650 loss was $3,460, which along with $26,000 in drawings, resulted in a $29,460 debit to Graham's current account.

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    © All Rights Reserved
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    16 views1 page

    Partnership (A)

    Uploaded by

    amna zaman
    Bill earned a salary of $12,000 and a profit share of $24,000 from a business with profits of $52,000. Ben also earned a profit share of $16,000. When the business earns goodwill due to the efforts of old partners, any benefit from goodwill on a partnership change is divided according to the old profit sharing ratios. Graham's share of a $8,650 loss was $3,460, which along with $26,000 in drawings, resulted in a $29,460 debit to Graham's current account.

    Copyright:

    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    of 1

    1.

    A
    2. C
    Bill: salary 12000
    Profit share(52000-12000) x3/5 24000 36000
    Ben :profit share (52000-12000) x2/5 16000
    3. A
    As business earns goodwill mainly due to the efforts of its old partners so any benefit arising on
    creation of goodwill on partnership change is apportioned between old partners in old profit
    sharing ratios
    4. D
    5. D
    6. D
    7. B
    8. D
    9. A
    10. B
    11. C
    12. C
    13. B
    14. C
    15. B
    16. A
    17. C
    18. B
    19. D

    Loss 8,650

    Graham's share (2/5) 3,460

    $
    Entries in current account Share of loss 3,460 Debit
    Drawings 26,000 Debit
    Total 29,460 Debit

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