Question 06 Chapter 4 of +2- Part-1
6. (Different cases of treatment of Goodwill) X, Y and Z who are presently sharing profits and losses in the ratio of 5:3:2 decide to share future profits equally with effect from 1st April 2016. The goodwill of the firm has been valued at Rs.1,08,000. Show the necessary accounting treatment under each of the following alternative cases:
- When no goodwill appears in the books.
- When goodwill appears in the books at Rs.1,08,000.
- When goodwill appears in the books at Rs. 18,000.
- When goodwill appears in the books at Rs.1,26,000.
The solution of Question 06 Chapter 4 of +2- Part-1: –
| Old Ratio of X, Y, & Z | = | 5 : 3: 2 |
| 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 Sacrificing/Gaining Share | = | 5 | – | 1 |
| 10 | 3 |
| = | 15 – 10 | |
| 30 |
| = | 5 | (Sacrifice) | |
| 30 |
| Y’s Sacrificing/Gaining Share | = | 3 | – | 1 |
| 10 | 3 |
| = | 9 – 10 | |
| 30 |
| = | -1 | (Gain) | |
| 30 |
| Z’s Sacrificing/Gaining Share | = | 2 | – | 1 |
| 10 | 3 |
| = | 6 – 10 | |
| 30 |
| = | -4 | (Gain) | |
| 30 |
(i) When no goodwill appears in the books.
| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| April 1 | Y’s Capital A/c (1,08,000 X 1/30) | Dr. | 3,600 | ||
| Z’s Capital A/c (1,08,000 X 4/30) | Dr. | 14,400 | |||
| To X’s Capital A/c (1,08,000 X 5/30) | 18,000 | ||||
| (Being goodwill adjusted through Partner Capital A/c) | |||||
(ii) When goodwill appears in the books at Rs.1,08,000.
| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| April 1 | X’s Capital A/c (1,08,000 x 5/10) | Dr. | 54,000 | ||
| Y’s Capital A/c (1,08,000 x 3/10) | Dr. | 32,400 | |||
| Z’s Capital A/c (1,08,000 x 2/10) | Dr. | 21,600 | |||
| To Goodwill A/c | 1,08,000 | ||||
| (Being goodwill already appeared in the book written off) | |||||
| Y’s Capital A/c (1,08,000 X 1/30) | Dr. | 3,600 | |||
| Z’s Capital A/c (1,08,000 X 4/30) | Dr. | 14,400 | |||
| To X’s Capital A/c (1,08,000 X 5/30) | 18,000 | ||||
| (Being goodwill adjusted through Partner Capital A/c) | |||||
(iii) When goodwill appears in the books at Rs.18,000.
| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| April 1 | X’s Capital A/c (18,000 x 5/10) | Dr. | 9,000 | ||
| Y’s Capital A/c (18,000 x 3/10) | Dr. | 5,400 | |||
| Z’s Capital A/c (18,000 x 2/10) | Dr. | 21,600 | |||
| To Goodwill A/c | 18,000 | ||||
| (Being goodwill already appeared in the books are written off) | |||||
| Y’s Capital A/c (1,08,000 X 1/30) | Dr. | 3,600 | |||
| Z’s Capital A/c (1,08,000 X 4/30) | Dr. | 14,400 | |||
| To X’s Capital A/c (1,08,000 X 5/30) | 18,000 | ||||
| (Being goodwill adjusted through Partner Capital A/c) | |||||
Advertisement-Y
(iv) When goodwill appears in the books at Rs.1,26,000.
| Journal | |||||
| Date | Particulars |
L.F. | Debit | Credit | |
| April 1 | X’s Capital A/c (1,26,000 x 5/10) | Dr. | 63,000 | ||
| Y’s Capital A/c (1,26,000 x 3/10) | Dr. | 37,800 | |||
| Z’s Capital A/c (1,26,000 x 2/10) | Dr. | 25,200 | |||
| To Goodwill A/c | 1,26,000 | ||||
| (Being excess goodwill written off in the old profit sharing ratio) | |||||
| Y’s Capital A/c (1,08,000 X 1/30) | Dr. | 3,600 | |||
| Z’s Capital A/c (1,08,000 X 4/30) | Dr. | 14,400 | |||
| To X’s Capital A/c (1,08,000 X 5/30) | 18,000 | ||||
| (Being goodwill adjusted through Partner Capital A/c) | |||||
This is all about Question 06 Chapter 4 of +2- Part- Usha publication.
Advertisement-X
Thanks, Please Like and share with your friends
Comment if you have any questions.
End of Solution
Check Out the Solution of all questions of this chapter:
The solution to all questions of Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership) Class 12 Usha Publication – 2024 is shown as follows, click on the image of the question to get the solution.
Thanks for completing the chapter. If you understand the question or we have helped you with your homework, please share our website on your social media. We are delighted to help you out.
Thanks again.
End of Post
Download a PDF of Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership):
If you want to download a PDF of this chapter then you can do it. Check out our PDF file on our Store page.
Chapter-Wise Solution of Usha Publication Accountancy – Part 1 Class 12 – Session 2024-25 as per the PSEB curriculum
Check out Solutions to all questions of the every chapter shown as under. The Solution of Accountancy – Part 1 Class 12 – Session 2024-25 is provided as per the new book published by Usha Publication.
Chapter No. 1 – Accounting Not-for-Profit Organisations (Deleted from the Syllabus)
Chapter No. 2 – Partnership Accounts – I (Introduction)
Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
Advertisement-X
Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Also, Check out our Comprehensive Chapter-wise solution of Advanced Accountancy Part 1 Class 12 by Unimax Publication
- Chapter No. 1 – Accounts of Non-Profit Organisations (Deleted from the Syllabus)
- Chapter No. 2 – Partnership Accounts – I (Basic Concepts)
- Chapter No. 3 – Partnership Accounts – II (Goodwill)
- Chapter No. 4 – Partnership Accounts – III (Change in Profit Sharing Ratio among Existing Partners)
- Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
- Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
- Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
Check out Part 2 of both books.
In Class 12th the accountancy has 2 books i.e. Part 1 and Part 2. The Books related to the Part 1 are shown above. but If you want to know more about Part 2, you can check it out from the following links. We have provided the links to both books i.e. Accountancy Part 2 by Usha Publication and Advanced Accountancy Part 2 by Unimax Publication.
1. Accountancy – Part 2 Class 12 – Session 2024-25 By Usha Publication
2. Advanced Accountancy Part 2 Class 12 by Unimax Publication
Advertisement-Y