Course

Unit 1

Partnership – Definition – Features – Types of Partnerships – advantages – limitations – Partnership Deed – content – Rules applicable in the absence of a Partnership Deed – Capital Accounts of Partners – Fixed Capital Method- Fluctuating Capital Method- Distribution of Profit among Partners

– Profit and Loss Appropriation Account.

Unit 2

Goodwill – meaning – Factors Affecting the Value of Goodwill – Need for Valuation of Goodwill, Methods of Valuation of Goodwill – Average Profits Method – weighted average profits method- Super Profits Method – Capitalisation Method: Capitalisation of Average Profits method, Capitalisation of Super Profits method – Reconstitution of a Partnership Firm.

Unit 3

Admission of a New Partner – New Profit-Sharing Ratio – Sacrificing Ratio – accounting treatment at the time of admission – Treatment of Goodwill – Revaluation Account – distribution of past profits or losses – Adjustment of Capital – accounting entries in the books of the firm.

Unit 4

Retirement and death of a partner – gaining ratio – accounting treatment on retirement and death

– calculation of the amount due to the retiring/deceased partner – Dissolution of the firm – Realisation Account – accounting entries in the books of the firm – Insolvency of partners – Garner vs. Murray.

Unit 5

Hire-Purchase and Instalment System – meaning – hire purchase and sale – Calculation of Interest – computation of cash price – journal entries in the books of hire purchaser and hire vendor – Default and re-possession -Meaning of Complete or Full Repossession – Partial Repossession -Journal Entries Under Partial Repossession.

Course Objective:

To equip the students with the skill of preparing accounts of partnerships, including admission of new partners, retirement or death of partners, dissolution of firms, and handling of hire-purchase transactions.

Course Outcomes:

The students will be able:

CO1: To understand the basic concepts of partnership accounts and apply these concepts on partnership accounts.

CO2: To understand the concept of goodwill of the partnership firm and evaluate the different goodwill valuation methods.

CO3: To understand the accounting procedures related to the admission of a new partner and apply the procedures for the preparation of partnership accounts.

CO4: To understand the accounting procedures related to retirement, death, and dissolution of the partnership firm and apply the procedures for the preparation of partnership accounts.

CO5: To understand the accounting treatment for hire purchase and instalment system and apply these accounting treatments for the preparation of their accounts.

Textbooks:

1. P. Jain, K. L. Narang – Advanced Accountancy Vol. 1 – Kalyani Publishers
2. N. Maheshwari, S. K. Maheshwary: Advanced Accountancy – Vikas Publishers

References:

1. L. Gupta and M. Radhaswamy, Advanced Accountancy Vol. 1 – Sultan Chand and Sons.
2. C. Shukla, T. S. Grewal, Advanced Accounts Vol. 1 – S. Chand and Co.