Question 6 Chapter 4 - Unimax Class 12 Part 1 - 2021

Question 6 Chapter 4 - Unimax Class 12 Part 1

6. Gold, Silver and Copper are partners in a firm sharing profits equally. They have decided to share profit in future in the ratio of 2 : 3 : 5. For this purpose the goodwill of the firm is valued at Rs. 150000. Record the necessary Journal entry to give effect to the new arrangement.
(a) When Goodwill is adjusted through Partner’s Capital Accounts.
(b) When Goodwill Account is raised and written off.

The solution of Question 6 Chapter 4 - Unimax Class 12 Part 1:

Working Note :

Old Share	New Share	Difference
Gold         1/3	2/10	1/3-2/10=4/30  (Sacrifice)
Silver        1/3	3/10	1/3-3/10=1/30  (Sacrifice)
Copper     1/3	5/10	1/3-5/10=[5/30] (Gain)

Copper will pay to Gold & Silver their shares of goodwill sacrificed by them.
Gold will get : Rs. 150000 x 4/30 = Rs. 20000
Silver will get : Rs. 150000 x 1/30 = Rs. 5000
Copper will pay total amount to gold & silver = 150000 x 5/30 = Rs. 25000

Journal

Date	Particulars		L.F.	Debit	Credit
	Copper’s Capital A/c	Dr.		25,000
	To Gold’s Capital A/c				20,000
	To Silver’s Capital A/c				5,000
	(Being adjustment entry Passed for treatment of Goodwill on change in Profit sharing ratio)

https://tutorstips.com/what-is-partnership/

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