Chapter 16 - Partnership 2

What is goodwill?

• a tangible asset

• an intangible asset

• an income

• an liability

If Goodwill is appearing in the Statement Of Financial Position , it will be Credited to

• New partner

• Retiring partners

• All partners

• Remaining Partners’

What is correct entry for loss on revaluation asset?

• Dr Revaluation account

  Cr Existing partner’s capital account

• Dr Assets account

  Cr Revaluation account

• Dr Revaluation account

  Cr Assets account

• Dr Existing partner’s capital account

  Cr Revaluation account

Profit on revaluation of assets and liabilities is distributed among the partners in their :

• New profit sharing ratio

• Old profit sharing ratio

• Loss ratio

• Gaining Ratio

A and B agree to admit C as a new partner on the condition that C is to contribute RM 50,000 as capital and RM 5,000 for his share of goodwill. The profit and loss sharing ratio among A, B and C is 2:1:2. What is the total goodwill of the partnership?

• RM 5,000

• RM 10,000

• RM 12,500

• RM 25,000

If the retiring partner is not paid full amount due to him immediately on retirement, his balance is transferred to:

• Loan account

• Capital account

• Bank account

• Suspense account

A, B and C are in partnership sharing profits and losses equally. On 1/4/2019, C decided to retire and D joined as a new partner. The new profit sharing ratio between A ,B and C is 3:1:1.

Upon the changes in partnership, the assets of partnership were to be revalued and value of motor vehicle decrease RM30,000 and office equipment increase RM3,000.

What is the profit/loss on revaluation for B?

• Profit RM 9000

• Loss RM 9000

• Profit RM 5400

• Loss RM 5400

A and B are two partners in a firm having capitals of RM 15,000 each. C is admitted and brought in RM 20,000 for his share of capital and 1/4 of it is premium. What is the amount of goodwill?

• 5,000

• 15,000

• 10,000

New partner can bring capital in cash or kind of assets.

• True

• False

The following is the extract of Statement of Financial Position as at 31 July 2021:

Non Current Asset

Motor vehicle RM56,000

Machinery RM25,300

Motor vehicle are revalued at RM 35,200 while machinery at RM23,000.

What is the amount of machinery revalued?

• Increase RM 20,800

• Decrease RM 20,800

• Increase RM 2,300

• Decrease RM 2,300