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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
B and C are in partnership sharing profits and losses as 3 : 1. They admit D into the firm; D pays a premium of ₹15,000 for a 1/3rd share of profits. As between themselves, B and C agree to share future profits and losses equally. Draft the Journal entries showing the appropriation of the premium.
New shares of B and C = 2/3 × 1/2 = 1/3 each. Sacrifice / (Gain): B = 3/4 – 1/3 = 5/12 (Sacrifice); C = 1/4 – 1/3 = –1/12 (Gain). As C gains, the whole premium goes to B, and C compensates B for his gain. Goodwill of firm = ₹15,000 × 3 = ₹45,000; C’s gain = ₹45,000 × 1/12 = ₹3,750.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Cash A/c Dr. | 15,000 | |||
| To Premium for Goodwill A/c | 15,000 | |||
| Premium for Goodwill A/c Dr. | 15,000 | |||
| To B’s Capital A/c | 15,000 | |||
| (Entire premium credited to B, the only sacrificing partner) | ||||
| C’s Capital A/c Dr. | 3,750 | |||
| To B’s Capital A/c | 3,750 | |||
| (C’s gain in goodwill charged to his capital and credited to B) |
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 4 Q.22 - Admission of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Admission of a Partner.
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