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

Question 17 Chapter 6 of +2-A

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)

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 17 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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