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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Ram and Mohan are partners sharing profits in the ratio of 3 : 2. On 1st April, 2024, they admit Sohan as a partner for a 1/4th share. Sohan contributed the following assets towards his capital and for his share of goodwill: Stock ₹60,000; Debtors ₹80,000; Land ₹1,00,000; Plant and Machinery ₹40,000. On the date of admission, goodwill of the firm was valued at ₹6,00,000. Pass the necessary Journal entries when: (1) partners do not withdraw their share of goodwill; (2) partners withdraw half of their share of goodwill.
Sohan’s share of goodwill = ₹6,00,000 × 1/4 = ₹1,50,000. Total assets brought = ₹2,80,000, so capital = ₹2,80,000 – ₹1,50,000 = ₹1,30,000. Premium is shared by Ram and Mohan in 3 : 2 (Ram ₹90,000; Mohan ₹60,000).
Case (1) – goodwill not withdrawn:
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2024 Apr 1 | Stock A/c Dr. | 60,000 | ||
| Debtors A/c Dr. | 80,000 | |||
| Land A/c Dr. | 1,00,000 | |||
| Plant and Machinery A/c Dr. | 40,000 | |||
| To Sohan’s Capital A/c | 1,30,000 | |||
| To Premium for Goodwill A/c | 1,50,000 | |||
| (Sohan brought assets for his capital and share of goodwill) | ||||
| 2024 Apr 1 | Premium for Goodwill A/c Dr. | 1,50,000 | ||
| To Ram’s Capital A/c | 90,000 | |||
| To Mohan’s Capital A/c | 60,000 | |||
| (Premium distributed in the sacrificing ratio 3 : 2) |
Case (2) – partners withdraw half of their share of goodwill: the two entries above are passed, followed by:
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2024 Apr 1 | Ram’s Capital A/c Dr. | 45,000 | ||
| Mohan’s Capital A/c Dr. | 30,000 | |||
| To Bank A/c | 75,000 | |||
| (Half of the share of goodwill withdrawn: Ram ₹45,000, Mohan ₹30,000) |
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.29 - 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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