Question 37 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 37 Chapter 5 - Unimax Class 12 Part 1 - 2021

37. K, L and M are partners with respective capitals of Rs. 30000, Rs. 20000 and Rs. 10000 and sharing profits in the ratio of 3 : 2 : 1. They agreed to admit N for 1/6th share on the terms that he will bring Rs. 20000 as capital and Rs. 10000 as premium for goodwill, and that M would retain his original share. N paid in his capital money but in respect of premium money he could bring in only Rs. 5000 and in regard to unpaid amount, it was decided that the firm will treat it as loan carrying interest @ 18% per annum. Give journal entries.

The solution of Question 37 Chapter 5 - Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Cash a/c	Dr.		20,000
	To K’s Capital a/c				20,000
	(Being capital brought in cash by new partner)
	Cash a/c	Dr.		5,000
	18% Loan a/c			5,000
	To Premium a/c				10,000
	(Being goodwill brought by new partner in cash and remained treated as loan int.)
	Premium a/c	Dr.		10000
	To K’s Capital a/c				6000
	To L’s Capital a/c				4000
	(Being goodwill of new partner credited to old partner’s capital a/c in sacrificing ratio)

Working Note :

If nothing has been mentioned in deed then old partners will sacrifice in their old ratio i.e. 3 : 2. (Here except M’s ratio because he would retain his old share)

 

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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