# Question 08 Chapter 4 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 08 Chapter 4 of +2-A

8. X, Y and Z are partners sharing profits and losses in the ratio of 5: 3: 2,
decided to share future profits and losses equally with effect from 1st April 2019. On that date, the goodwill appeared in the books at 12,000. But it was revalued at 30,000. Pass Journal entries assuming that goodwill will not appear in the books of account.

The solution of Question 08 Chapter 4 of +2-A

 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 (Sacrificing) 30
 Y’s Share Sacrificing/Gaining = 3 – 1 10 3
 = 9 – 10 30
 = – 1 Gaining 30
 Mandeep’s Sacrificing/Gaining share = 2 – 1 10 3
 = 6 – 10 30
 = – 4 Gaining 30

Written off Goodwill already appeared in the books: –

 Amount of Goodwill Debited to X’s Capital = 12,000 X 5 10 = 5,000

 Amount of Goodwill Debited to Y’s Capital = 12,000 X 3 10 = 3,600

 Amount of Goodwill Debited to Z’s Capital = 12,000 X 2 10 = 2,400

Adjustment of Goodwill: –

 Amount of Goodwill Credited to Mandeep’s Capital = 30,000 X 5 30 = 5,000

 Amount of Goodwill Debited to Y’s Capital = 30,000 X 1 30 = 1,000

 Amount of Goodwill Debited to Z’s Capital = 30,000 X 4 30 = 1,000

 In the Books of _______________ Date Particulars L.F. Debit Credit 2019 April 1 X’s Capital A/c Dr 6,000 Y’s Capital A/c Dr 3,000 Z’s Capital A/c Dr 2,000 To Goodwill A/c 10,000 (Being amount of goodwill written off which is already appeared in the books) April 1 Y’s Capital A/c Dr 1,000 Z’s Capital A/c Dr 4,000 To X’s Capital A/c 5,000 (Being amount of goodwill adjusted through a capital account)

### 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)

• 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

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