Question 05 Chapter 4 of +2 Part-1 – USHA Publication 12 Class Part – 1

Question 05 Chapter 4 of +2- Part-

Question 05 Chapter 4 of +2-Part-1

5. (Goodwill exist in the balance sheet) P, Q and R are partners in 4:3:3 ratio. The new ratio is 1:2:2. Goodwill already in the books Rs.75,000 and at the time of change in ratio it is valued at Rs.1,05,000. Pass entries in journal:

 

The solution of Question 05 Chapter 4 of +2 Part-1: – 

 

In the Books of _______________
Date Particulars
L.F. Debit Credit
           
 (1) P’s Capital A/c (75000*4/10) Dr.   30,000  
  Q’s Capital A/c (75000*3/10) Dr.   22,500  
  R’s Capital A/c (75000*3/10) Dr.   22,500  
  To Goodwill A/c       75,000
  (Being amount of goodwill written off in the old profit sharing ratio)      
         
(2) Goodwill A/c Dr.   1,05,000  
  To P’s Capital A/c (1,05,000*1/5)     21,000
  To Q’s Capital A/c (1,05,000*2/5)     42,000
  To R’s Capital A/c ((1,05,000*2/5)     42,000
  (Being amount of goodwill on change in profit sharing ratio)      

 

 

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

2 thoughts on “Question 05 Chapter 4 of +2 Part-1 – USHA Publication 12 Class Part – 1”

  1. Practical problem 5 of chapter 4 I can’t understand it’s 2nd step l mean I want to know why we do this I hope u understand and solve my problem

    1. Thanks for the comment.
      Yes, I will help you to understand it.
      We have two types of goodwill in the question.
      1. Already in the books
      2. After revaluation

      The 1st type of goodwill is already in the books, So we have to distribute it to all partners in the old profit sharing ratio to written off it from the books. Because it is related to the previous period in this period the profit is distributed as per the old profit sharing ratio.

      The 2nd type of goodwill is revalued at the time of the changing profit sharing ratio but this is not recorded in the books, So we have to record it in the books by posting 2nd journal entry. and distribute this in the new profit sharing ratio.

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