Question 17 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 17 Chapter 6 of +2-A

Hanny, Pammy, and Sunny are partners sharing profits in the ratio of 3: 2: 1. Goodwill is appearing in the books at a value of 60,000. Pammy retires and at the time of Pammy’s retirement, goodwill is valued at 84,000. Hanny and Sunny decided to share future profits in the ratio of 2: 1. Record the necessary journal entries.

The solution of Question 17 Chapter 6 of +2-A: –

 Date Particulars L.F. Debit Credit Hanny’s Capital A/c Dr 30,000 Pammy’s Capital A/c Dr 20,000 Sunny’s Capital A/c Dr 10,000 To Goodwill A/c 60,000 (Being Goodwill in books written off in the old ratio i.e. 3:2:1) Hanny’s Capital A/c Dr 14,000 Sunny’s Capital A/c Dr 14,000 To Pammy’s Capital A/c 28,000 (Being share of Pammy’s goodwill adjusted)

Working Note: –

Old Ratio of Hanny, Pammy and Sunny = 3: 2: 1
Pammy retires from the firm

New Ratio of Hanny and Sunny = 2: 1

Calculation of Gaining Ratio: –

Gaining Ratio = New Ratio – Old Ratio

 Hanny’s gaining Share = 2 – 3 3 6 = 4 – 3 6 = 1 6
 Sunny’s Gaining Share = 1 – 1 3 6 = 2 – 1 6 = 1 6

Firm’s Share of Goodwill = 84,000

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

 Pammy’s Share of Goodwill = 84,000 X 2 6 = 28,000

Gaining Ratio of Hanny and Sunny = 1:1

 Hanny’ gain = B’s Goodwill X Gaining share of Hanny = 28,000 X 1 2 = 14,000
 Sunny ’ gain = Manisha’s Goodwill X Gaining share of Sunny = 28,000 X 1 2 = 14,000

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)

• 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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