Question 36 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part - 1

Question 36 Chapter 5 of +2-Part-1

36. (Hidden Goodwill) A and B are partners with capitals of Rs. 8,000 and Rs. 6,000 respectively. They admit C as a partner with 1/4th share in the profit of the firm. C brings Rs. 8,000 as his share of capital. Give journal entries to record goodwill.

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The video consists solution of question numbers from 36 to 38 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 36 from the following video by using time stamps of the video.

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The solution of Question 36 Chapter 5 of +2 Part-1: - 

Journal

Date	Particulars		L.F.	Debit	Credit
i)	Cash A/c	Dr.		8,000
	To C’s Capital A/c				8,000
	(Being cash brought by C as capital )
ii)	C’s Current A/c	Dr.		2,500
	To A’s Capital A/c				1,250
	To B’s Capital A/c				1,250
	(Being C’s share of Goodwill adjusted in sacrificing ratio i.e. equall)

Working notes:

Calculation of hidden Goodwill: Total capital of the firm after C’s admission:
Rs.(8000+6000+8000)= Rs. 22,000

Firm’s capital taking C’s capital as a base	=	4	X	8,000
		1
	=	Rs 32,000
Hidden Goodwill = Rs.(32,000-22,000)
	=	Rs. 10,000

C’s share of Goodwill	=	1	X	10,000
		4
	=	Rs 2,500

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