Question 19 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 19 Chapter 6 of +2-A

Question 19 Chapter 6 of +2-A

19. A, B and C are partners sharing profits in the ratio of 4/9: 3/9: 2/9. B retires and his capital after making adjustments for reserves and gain profit on revaluation stands at 1,39,200. A and C agreed to pay him 1,50,000 in full settlement of his claim. Record necessary journal entry for adjustment of goodwill if the new profit-sharing ratio is decided at 5 : 3.

The solution of Question 19 Chapter 6 of +2-A: –

 

Date Particulars
L.F. Debit Credit
  A’s Capital A/c Dr   5,850  
  C’s Capital A/c Dr   4,950  
  To B’s Capital A/c       10,800
  (Being Adjustment of B′s share of goodwill)      
           
           

Working Note: –

i. Calculation of B’s share of goodwill

A B and C are sharing profits in ratio 4/9: 3/9: 2/9
B retires from the firm. Remaining partners agreed to pay him Rs 1,50,000
B’s capital after making necessary adjustments Rs 1,39,200
Therefore, Hidden Goodwill is Rs 1, 50, 000– 1, 39, 200 i.e. Rs 10,800

ii Gaining Ratio

New profit sharing ratio between A and B is 5:3

A’s Gain = 5 4
8 9
         
  = 45 32
  72
         
  = 13    
  72    

 

C’s Gain = 3 2
8 9
         
  = 27 16
  72
         
  = 11    
  72    

A:C = 13: 11

Thus, B’s share of goodwill will be brought in by A and C in the gaining ratio 13:11 i.e.

A is debited with = 10,800 X 13
27
         
  = Rs 5,850    

 

C is debited with = 10,800 X 11
27
         
  = Rs 4,950    

 

 

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

 

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

2 Book 1 min - Question 19 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

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.