Question 14 Chapter 6 - Unimax Class 12 Part 1 - 2021

Question 14 Chapter 6 – Unimax Class 12 Part 1 – 2021

Table of Contents

The solution of Question 14 Chapter 6 – Unimax Class 12 Part 1: –

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

14. X, Y and Z are partners sharing profits and losses in the ratio of 3 : 2 : 1. Y retires selling his share of Goodwill to X and Z for Rs. 16000 ; Rs. 10000 being paid by X and Rs. 6000 by Z. The profit for the year after Y’s retirement is Rs. 24000. Pass necessary journal entries to :

Sale of Y’s share of Goodwill to X and Z.
Distribute the profit between X and Z.

The solution of Question 14 Chapter 6 – Unimax Class 12 Part 1: –

Journal

Date	Particulars		L.F.	Debit	Credit

	X’s Capital a/c	Dr.		10,000
	Z’s Capital A/c	Dr.		6,000
	To Y’s Capital a/c				16,000
	(Being amount transferred from gaining partner’s capital accounts to retiring partner’s capital a/c on account of goodwill)

	Profit and loss appropriation a/c	Dr.		24,000
	To X’s Capital A/c				17,000
	To Z’s Capital a/c				7,000
	(Being profits distributed between X and Z in their new profit sharing ratio)

Working Note:

(i) Calculation of Gaining Ratio :
As X has transferred Rs. 10000 and Z has transferred Rs. 6000 to Y’s Capital a/c (on account of goodwill), therefore gaining ratio of X and Z is 5 : 3 (10000 : 6000).
(ii) Calculation of new profit sharing ratio :
X’s new share = Old share + gain
= 3/6 + (5/8 of Y’s share)
= 3/6 + (5/8 of 2/6)
= 17/24
Z’s new share = Old share + gain
= 1/6 + (3/8 of Y’s share)
= 1/6 + (3/8 of 2/6)
= 7/24
New profit sharing ratio = 17 : 7 (X : Z)