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Question 05 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 05 Chapter 4 of +2-A
Question No.05 Chapter No.4 - T.S. Grewal +2 Book 2019-Solution

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Question 05 Chapter 4 of +2-A

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5. A, B and C shared profits and losses in the ratio of 3 : 2 : 1 respectively. With effect from 1st April, 2019, they agreed to share profits equally. The goodwill of the firm was valued at 18,000. Pass necessary Journal entries when: (a) Goodwill is adjusted through Partners’ Capital Accounts; and (b) Goodwill is raised and written off.

The solution of Question 05 Chapter 4 of +2-A:

 

Old Ratio of X, Y, & Z=3 : 2 : 1 
New Ratio of X, Y, & Z=1 : 1 : 1

Calculate the Sacrificing or Gaining Ratio of Partners
Sacrificing or Gaining Ratio = Old Ratio – New Ratio


X’s Share Sacrificing/Gaining=31
63
 =3 – 2
 6
 =1Sacrificing
 6
Y’s Share Sacrificing/Gaining=21
63
 =2 – 2
 6
 =Nil

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Z’s Share Sacrificing/Gaining=11
63

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 =1 -2
 6
 =-1Gaining
 6

Case (a)

Amount of Goodwill for Adjustment=18,000 X1
 6
 =3,000 

 

In the Books of _______________
DateParticulars
L.F.DebitCredit
2019     
April 1C’s Capital A/cDr 3,000 
 To A’s Capital A/c   3,000
 (Being amount of goodwill adjusted through capital account)    

 

Case (B)

In the Books of _______________
DateParticulars
L.F.DebitCredit
2019     
April 1Goodwill A/cDr 18,000 
 To A’s Capital A/c   9,000
 To B’s Capital A/c   9,000
 To C’s Capital A/c   9,000
 (Being amount of goodwill raised in the books in the old ratio)    
April 1A’s Capital A/cDr 6,000 
 B’s Capital A/cDr 6,000 
 C’s Capital A/cDr 6,000 
 To Goodwill A/c   18,000
 (Being amount of goodwill written off in the new profit sharing ratio)    

 

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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)

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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