Question 16 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 16 Chapter 6 of +2-A

Question 16 Chapter 6 of +2-A

16. A B and C are partners sharing profits in the ratio of 3: 2: 1.
B retired and the new profit-sharing ratio between A and C was 2: 1. On B’s retirement, the goodwill of the firm was valued at 90,000. Pass necessary Journal entry for the treatment of goodwill on B’s retirement.

The solution of Question 16 Chapter 6 of +2-A: –

 

Date Particulars
L.F. Debit Credit
  A’s Capital A/c Dr   15,000  
  C’s Capital A/c Dr   15,000  
  To B’s Capital A/c       30,000
  (Being share of B’s goodwill adjusted)      

Working Note: –

Old Ratio of A, B and C = 3: 2: 1
B retires from the firm

New Ratio of A and C = 2: 1

Calculation of Gaining Ratio: –

Gaining Ratio = New Ratio – Old Ratio

A’s gaining Share = 2 3
3 6
         
  = 4 3
  6
         
  = 1    
  6    

 

C’s Gaining Share = 1 1
3 6
         
  = 2 1
  6
         
  = 1    
  6    

 

Firm’s Share of Goodwill = 90,000

B’s Share of Goodwill =  Firm’s Goodwill X B’s Shares

B’s Share of Goodwill = 90,000 X 2
6
         
  = 30,000    

Gaining Ratio of A and C  = 1:1

A’ gain = B’s Goodwill X Gaining share of A
  = 30,000 X 1
2
         
  = 15,000    

 

C’ gain = Manisha’s Goodwill X Gaining share of Sonia
  = 30,000 X 1
2
         
  = 15,000    

 

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

 

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2 Book 1 min - Question 16 Chapter 6 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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