Question 40 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 40 Chapter 5 - Unimax Class 12 Part 1 - 2021

40. P and Q are in partnership sharing profit and loss in 3 : 1. They admit R into the firm, R paying a premium of Rs. 15000 for 1/3rd share of the profits. As between themselves, P and Q agree to share future profits and losses equally. Pass necessary journal entries.

The solution of Question 40 Chapter 5 - Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Cash a/c	Dr.		15,000
	To Premium a/c				15,000
	(Being goodwill brought in cash by new partner)				10,000
	Premium a/c	Dr.		15,000
	To P’s Capital a/c				15,000
	(Being goodwill brought by new partners credited to sacrificing partners’ capital a/c)
	Q’s Capital a/c			3,750
	To P’s Capital a/c				3,750
	(Being compensation paid by Q to P for his gaining share)

Working Note
Let total profit = 1
R’s Share =1/3
Remaining Share = 1 -1/3 =3-1/3 =2/3
P’s new share =1/2 X 2/3
                       =1/3
Q’s new share =1/2 X 2/3 =1/2
New PSR = 1 : 1 : 1
P’s Sacrifice =3/4-1/3 =5/12
Q’s Sacrifice =1/4-1/3 =5/12
So P has made sacrifice 5/12 of his share
Total goodwill of firm = Rs. 15000 X 3/1 = Rs. 45000
Q’s compensation = 45000 X 1/12 = Rs. 3750

 

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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