# Question 20 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.20 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

Question 20 Chapter 5 of +2-A

20. A and B are partners sharing profits and losses in the ratio of 2 : 5. They admit C on the condition that he will bring 14,000 as his share of goodwill to be distributed between A and B. C’s share in the future profits or losses will be 1/4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by C will be received by A and B?

The solution of Question 20 Chapter 6 of +2-A

 Old Ratio of A and B = 2 : 5 C is admitted for 1/4th share of profit

Let the total share of the business = 1
Remaining share of A and B after C’s Admission= Total Share – C’s Share

 Remaining share = 1 – 1 4
 = 4 – 1 4
 = 3 4

To Calculate to New Ratio distribute the remaining share in the old ratio of old partners’

New Ratio= Combined share of A and B X Old Ratio

 A’s New Ratio = 3 X 2 4 7
 = 6 28

 B’s New Ratio = 3 X 5 4 7

 = 15 28

 C’s New Ratio = 1 X 7 4 7
 = 7 28
 New Profit sharing Ratio between A ,B and C = 6 : 15 : 7

Distribution of C’s share of Goodwill
C’s share of Goodwill = 14,000

 A’s get share of Goodwill = 14,000 X 2 7 = 4,000

 B’s get share of Goodwill = 14,000 X 2 7 = 10,000

### 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