Question 31 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 31 Chapter 5 - Unimax Class 12 Part 1 - 2021

31. A and B are partners sharing profits and losses in ratio of 3 : 2. Their books showed goodwill at Rs. 20,000. C is admitted with 1/5th share which he acquires equally from A and B. C brings Rs. 30,000 as his capital and Rs. 15,000 as his share of goodwill. Profit at the end of the year amounted to Rs. 1,00,000. Give journal entries to carry out above arrangement.

The solution of Question 31 Chapter 5 - Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	A’s Capital a/c	Dr.		12000
	B’s Capital a/c	Dr.		8000
	To Goodwill a/c				20000
	(Being old goodwill w/o by old partner’s in old ratio)
	Cash a/c	Dr.		10000
	To C’s Capital a/c				10000
	To Premium a/c
	(Being goodwill and capital brought in cash by new partner)
	Premium a/c	Dr.		3000
	To A’s Capital a/c				1800
	To B’s Capital a/c				12000
	(Being goodwill credited to old partners’ capital a/c in sacrificing ratio)

Journal

Date	Particulars		L.F.	Debit	Credit
	Profit and Loss Appropriation a/c	Dr.		1,00,000
	To A’s Capital a/c				50,000
	To B’s Capital a/c				30,000
	To C’s Capital a/c				20,000
	(Being profit distributed among partner in new profit sharing ratio)

Working Note
Let Total Profit = 1
C’s Share = 1/5
Remaining Share = 1 - 1/5 = 4/5
A’s new share =3/5-[1/2 X 1/5]
                       = 5/10
B’s new share =2/5-[1/2 X 1/5]
                      =2/5-1/10=4-1/10=3/10
New PSR =5/10: 3/10: 1/5
              = 5 : 3 : 2
A’s share = 3/5 – 5/10 = 1/10
B’s share = 2/5 – 3/10 = 1/10
S.R. = 1 : 1

 

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T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 - Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 - Accounting for Partnership Firms - Fundamentals
• Chapter No. 3 - Goodwill: Nature and Valuation
• Chapter No. 4 - Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 - Admission of a Partner
• Chapter No. 6 - Retirement/Death of a Partner
• Chapter No. 7 - Dissolution of a Partnership Firm

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 8 - Company Accounts -  Accounting for Share Capital
• Chapter No. 9 - Company Accounts - Issue of Debentures
• Chapter No. 10 - Redemption of Debentures

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 - Financial Statements of a Company
• Chapter No. 2 - Financial Statement Analysis 
• Chapter No. 3 - Tools of Financial Statement Analysis - Comparative Statements and Common- Size Statements
• Chapter No. 4 - Accounting Ratios
• Chapter No. 5 - Cash Flow Statement

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication