Advertisement

Question 21 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 21 Chapter 5 of +2-A
Question No.21 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

Advertisement

Question 21 Chapter 5 of +2-A

Advertisement

21. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. A new partner C is admitted. A surrenders 1/5th of his share and B surrenders 2/5th of his share in favour of C. For the purpose of C’s admission, goodwill of the firm is valued at 75,000 and C brings in his share of goodwill in cash which is retained in the firm’s books. Journalise the above transactions.

 

The solution of Question 21 Chapter 6 of +2-A

Advertisement-X

 

DateParticulars
L.F.DebitCredit
 Cash A/cDr 21,000 
 To Premium for Goodwill A/c   21,000
 (Being C brought his share of goodwill)    
 Premium for Goodwill A/cDr 21,000 
 To A’s Capital A/c   9,000
 To B’s Capital A/c   12,000
 (Being goodwill distributed among the old partners’ in their sacrificing ratio)    

 

Old Ratio of A and B=3 : 2
A surrenders 1/5th of his share in the favour of C  
B surrenders 2/5th of his share in the favour of C  

In this case we have to calculate the sacrificing share of both partners with the following formula and then subtract this share from the profit share of old partners: –

Sacrificing Share of Old Partners = Old Partner’s Share X Sacrificed Ratio

A Sacrifice Share=3X1
5
 =3
 25

 

B Sacrifice Share=2X2
5
 =10
 25

 

Advertisement-X

Advertisement-Y

New Ratio of Old Partners = Old Ratio – Sacrificed Ratio



A New Profit Share=33
525 
 =15 – 3
25
 =12
 25



B New Profit Share=2X4
525
 =10 – 4
25
 =6
 25
C’s Share=A’s Sacrificing + B’s Sacrificing
C’s New Ratio=3+4
2525
 =3 + 4
25

Advertisement-Y

 =7
 25
New Profit sharing Ratio between A ,B and C=12 : 6 : 7


Calculate the C’s share of Goodwill
Firm’s Total Goodwill = 75,000

A’s get share of Goodwill=75,000X7
25
 =21,000  

Distribution of C’s share of Goodwill
C’s share of Goodwill = 21,000

A’s get share of Goodwill=21,000X3
7
 = 9,000
  

 

B’s get share of Goodwill=21,000X2
7
 =6,000
  

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

 

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

Advertisement

Advertisement

error: Content is protected !!