Question
Unrecorded liability, when paid on dissolution of a firm is debited to: a. Realization account b. Liabilities account c. Partners capital accounts d. Asset account
Unrecorded liability, when paid on dissolution of a firm is debited to:
a.
Realization account
b.
Liabilities account
c.
Partners capital accounts
d.
Asset account
____________________________________________________________
A,B and C were partners, sharing profit and losses in the ratio of 3:2:1. B died, the firm decided to value the goodwill on the basis of 3 years purchase of average of 5 years profits. The profits of the firm for the last five years before charging interest on capital were OMR 11,000, OMR 9,000, OMR 11,000, OMR 7,000 and OMR 8,000. The capital of the firm stood at OMR 50,000 and interest rate is 8%. Value of goodwill will be:
a.
OMR 11,000
b.
OMR 10,000
c.
OMR 21,000
d.
OMR 15,600
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