Share and share capital: nature and types.Īccounting for share capital: issue and allotment of equity and preferences shares. (ii) If a partner has borne and/ or paid the realization expenses, it should be stated.

(i) If the realized value of an asset is not given, it is to be presumed that it has not realized any amount.

Settlement of accounts – preparation of realizationĪccount, and other related accounts: capital accounts of partners and cash/bank a/c (excluding piecemeal distribution, sale to a company, and insolvency of partner(s)). Preparation of deceased partner’s capital account and his executor’s account.ĭissolution of a partnership firm: meaning of dissolution of partnership and partnership firm, types of dissolution of a firm. Preparation of loan account of the retiring partner.Ĭalculation of deceased partner’s share of profit till the date of death. Retirement and death of a partner: effect of retirement/death of a partner on change in profit sharing ratio, treatment of goodwill, treatment for revaluation of assets and reassessment of liabilities, adjustment of accumulated profits and reserves, adjustment of capital accounts, and preparation of balance sheet. Preparation of revaluation account and balance sheet.Īdmission of a partner – effect of admission of a partner on change in the profit-sharing ratio, treatment of goodwill, treatment for revaluation of assets and re-assessment of liabilities, treatment of reserves and accumulated profits, adjustment of capital accounts, and preparation of balance sheet. Raising and writing off goodwill is excluded.Īccounting for Partnership firms – Reconstitution and Dissolution.Ĭhange in the Profit Sharing Ratio among the existing partners – sacrificing ratio, gaining ratio, accounting for revaluation of assets and reassessment of liabilities, and treatment of reserves and accumulated profits.

Goodwill to be adjusted through partners’ capital/ current account. Interest on a partner’s loan is to be treated as a charge against profits.

Goodwill: nature, factors affecting and methods of valuation – average profit, super profit, and capitalization

Accountancy project class 12