Question
Distinguish between firm's debts and private debts.
✓
Answer
|
Basis
|
Firm's Debts
|
Private Debts
|
|
|
i.
|
Meaning
|
It means the debt owed by the firm outsiders.
|
It means debt owed by a partner in his personal capacity to any other person.
|
|
ii.
|
Liability
|
All the partners are jointly and severally liable for firm's debts.
|
Concerned partner is liable personally liable for his private debt.
|
|
iii.
|
Application of firm property
|
Firm's property is applied first for in setting firm's dents.
|
Share of the concerned partner in excess of firm's property over firm's debts can be applied for private debts.
|
|
iv.
|
Application of private property
|
Excess of partner's private property over his private debts can be applied debts for firm's debts.
|
Private property is applied first for private Private debts.
|
Need a full question paper?
Generate a complete, print-ready paper with questions like this in minutes — across 16+ boards, with answer keys.
Explore more
Similar questions
State any three circumstances other than (i) death of a partner, (ii) admission of a partner and (iii) retirement of a partner when need for valuation of goodwill of a firm may arise.
Receipts and Payments Account of Shimla Sports Club showed the ₹ 82,000 were received by way of subscriptions for the year ended on March 31, 2016.
The Additional information was as under:
Subscription Outstanding as on March 31, 2015 were ₹ 8,400.
Subscription Outstanding as on March 31, 2016 were ₹ 9,200.
Subscription received in advance as on March 31, 2015 were ₹ 3,000.
Subscription received in advance as on March 31, 2016 were ₹ 5,000.
Show how the above information would appear in the final accounts for the year ended on March 31, 2016.
The Additional information was as under:
Subscription Outstanding as on March 31, 2015 were ₹ 8,400.
Subscription Outstanding as on March 31, 2016 were ₹ 9,200.
Subscription received in advance as on March 31, 2015 were ₹ 3,000.
Subscription received in advance as on March 31, 2016 were ₹ 5,000.
Show how the above information would appear in the final accounts for the year ended on March 31, 2016.
X,Y and z are partners sharing profits in the ratio of 3 : 2 : 1. Y retires and X and Y decide to share the future profits in the ratio of 3 : 2. goodwill of the firm is valued at ₹ 1,50,000 fill in the missing figures in the following journal entries:
Give three essential features of Receipts and Payments Account.
Deepak Ltd. purchased furniture for ₹ 2,20,000 from M/s Furniture Mart. 50% of the amount was paid to Furniture Mart by accepting a bill of exchange and for the balance the company issued 9% debentures of ₹ 100 each at a premium of 10% in favour of Furniture Mart.
Pass necessary journal entries in the books of Deepak Ltd. for the above transactions.
Pass necessary journal entries in the books of Deepak Ltd. for the above transactions.
X and Y are partners in a firm sharing profits in the ratio of 3 : 2 with capitals of ₹ 1,20,000 and ₹ 54,000 respectively. They admitted Z as a partner with ₹ 75,000 for $\frac{1}{3}\text{rd}$ share in the profits of the firm. Adjust the capitals of the partners according to Z's capital and his share in the business. Calculate the amount of actual cash to be paid off or brought in by the old partners.
→How will you treat the following items while preparing Income & Expenditure A/c and Balance Sheet of Non-profit Organisation.
- Donation for Building.
- Sale of Newspapers.
- Investment purchased.
A partnership firm earned net profits during the past three years as follows:
Capital investment in the firm throughout the above-mentioned period has been ₹ 4,00,000. Having regard to the risk involved, 15% in considered to be a fair return on the capital. The remuneration of the partners during this period is estimated to be ₹ 1,00,000 p.a. Calculate value of goodwill on the basis of two years' purchase of average super profit earned during the above-mentioned three years.
|
Year ended
|
31st March, 2018
|
31st March, 2017
|
31st March, 2016
|
|
Net Profit (₹)
|
2,30,000
|
2,00,000
|
1,70,000
|
A, B, C and D are in partnership sharing profits and losses in the ratio of 36 : 24 : 20 : 20 respectively. E joins the partnership for 20% share and A, B, C and D in future would share profits among themselves as $\frac{3}{10}:\frac{4}{10}:\frac{2}{10}:\frac{1}{10}$ Calculate new profit-sharing ratio after E's admission .
→Explain the provisions of Section 48 of Partnership Act, 1932 dealing with the settlement of accounts at the time of dissolution of firm.