Accountancy: 2019:CBSE:[Delhi]:Set -1

Revalued Goodwill of the firm on Mitali's admission

= ₹2,00,000

Premium for Goodwill brought in cash by Mitali = ₹20,000

So, Mitali's share in future profit of the firm =

Atul's Account has only been credited by the premium brought in by Mitali.

So, Atul's Sacrificing Share = Profit Share of Mitali =

New Profit Share of Atul =

Hence,

As per Section 2(50) of the Companies Act 2013, Issued capital means such capital as the company issues from time to time for subscription.

Issued capital is a part of Authorised capital that is issued for subscription.

It includes besides shares issued for subscription, shares allotted for consideration other than cash, shares subscribed by signatories to the memorandum of Association and shares taken by directors as qualifying shares.

Employee Stock Option means option granted by the company to its employees and employee directors to subscribe the shares at a price that is lower than the market price, i.e., fair value.
It is a right granted by the company but it is not an obligation on the employee to subscribe it.

Following are two situations when a partnership firm can be compulsorily dissolved.

• When business of the firm becomes unlawful.
• When all the partners or all the partners except one become insolvent.

The ratio in which the continuing partners acquire the outgoing (retired or deceased) partner’s share is called the Gaining Ratio.

Algebraically,

Gaining Ratio = New Profit Sharing Ratio - Old Profit Sharing Ratio.

Calculation of gaining ratio is necessary for adjusting the retiring partner’s share of goodwill.

Remaining partners will compensate the outgoing partner by payment of premium for goodwill in their gaining ratio.

If any partner gives loan to the firm, R is entitled to receive interest at the agreed rate of interest and specified in the Partnership Deed.
In the absence of a Partnership Deed, provisions of Indian Partnership Act, 1932 will apply than R would be given interest @ 6% per annum.

In case the donor specifies the purpose for which the donation can be used, it is a Specific Donation.
Specific donation is capitalised and is shown on the liabilities side of the Balance sheet.

Not-for-Profit organisations are not established for the purpose of earning profit, they prepare Income and Expenditure Account instead of Profit and Loss Account.
Income and Expenditure Account is prepared at the end of the accounting period matching revenue expenses with revenue receipts (income) to determine surplus or deficit and it is prepared following accrual basis of accounting.