Q.No.41 | Chapter 5 – Admission of Partner | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1

Question 41 Chapter 5 of +2-A

41. Anil and Sunil are partners in a firm with fixed capitals of 3,20,000 and
2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April, 2012. Charu brought 3,20,000 as her share of capital.
Calculate value of goodwill and record necessary Journal entries

The solution of Question 41 Chapter 5 of +2-A: -

 

Date	Particulars		L.F.	Debit	Credit
	Bank A/c	Dr		3,20,000
	To Charu’s Capital A/c				3,20,000
	(Being Charu’s share of goodwill adjusted with his capital account)
	Charu’s Current A/c	Dr		1,00,000
	To Anil’s Capital A/c				50,000
	To Sunil’s Capital A/c				50,000
	(Being Charu’s share of goodwill adjusted through current accounts)

 

Working Note: -

Total Capital of the firm on the Basis of Charu’s Capital

Total Capital of the firm = Charu’s Capital * Reciprocal of his share

=	3,20,000	*	4
			1
=	12,80,000

Actual Capital of Firm = Capital of Old Partners + Incoming Partner’s Capital

=	3,20,000 + 2,40,000 + 3,20,000
=	8,80,000

 

Goodwill	=	Total Capital of the firm on basis of Charu’s Capital	- Actual Capital of Firm
	=	12,80,000	+8,80,000
	=	4,00,000

Charu’s Share of Goodwill

=

Firm’s Goodwill  x

Share of E’s

=	4,00,000	X	1
			4
=	1,00,000

Sacrificing Ratio of Anil and Sunil = 1 : 1 

Anil will get Share of Goodwill

=

Charu’s Goodwill  x

Sacrifice share of A

=	1,00,000	X	1
			2
	=	50,000

 

Sunil will get Share of Goodwill	=	Charu’s Goodwill  x	Sacrifice share of A

=	1,00,000	X	1
			2
	=	50,000

 

 

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

 

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