Question 18 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 18 Chapter 6 of +2-A

Question 18 Chapter 6 of +2-A

18. X, Y and Z are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of 60,000. Y retires and at the time of Y’s retirement, goodwill is valued at 84,000. X and Z decided to share future profits in the ratio of 2 : 1. Pass the necessary Journal entries through Goodwill Account

The solution of Question 18 Chapter 6 of +2-A: –

 

Date Particulars
L.F. Debit Credit
  X’s Capital A/c Dr   30,000  
  Y’s Capital A/c Dr   20,000  
  Z’s Capital A/c Dr   10,000  
  To Goodwill A/c       60,000
  (BeingGoodwill wrote off )      
           
           
           
  X’s Capital A/c Dr   14,000  
  Z’s Capital A/c Dr   14,000  
  To Y’s Capital A/c       28,000
  (BeingAdjustment of Y′s share of goodwill)      

Working Note: –

X :Y :Z = 3:2:1(Old ratio)
X :Z = 2:1(New ratio)

Calculation of Gaining Ratio: –

Gaining Ratio = New Ratio – Old Ratio

X’s Gain = 2 3
3 6
         
  = 4 3
  6
         
  = 1    
  6    

 

Z’s Gain = 1 1
3 6
         
  = 2 1
  6
         
  = 1    
  6    

X:Z = 1: 1

Calculation of Retiring Partner’s Share of Goodwill

Y’s share of goodwill = 84,000 X 2
6
         
  = 28,000    

 

Therefore, X’s Capital A/c will be debited with = 28,000 X 1
2
         
  = 14,000    

 

Therefore, Z’s Capital A/c will be debited with = 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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Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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