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Question 22 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 22 Chapter 5 of +2-A
Question No.22 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

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Question 22 Chapter 5 of +2-A

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22. Give Journal entries to record the following arrangements in the books of the firm:

  1. B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium (goodwill) of 2,000 for 1/4th share of the profits, shares of B and C remain as before.
  2. B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium of 2,100 for 1/4th share of profits which he acquires 1/6th from B and 1/12th from C.

 

The solution of Question 22 Chapter 6 of +2-A

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Case A

DateParticulars
L.F.DebitCredit
 Cash A/cDr 2,000 
 To Premium for Goodwill A/c   2,000
 (Being C brought his share of goodwill)    
 Premium for Goodwill A/cDr 2,000 
 To B’s Capital A/c   1,200
 To C’s Capital A/c   800
 (Being goodwill distributed among the old partners’ in their sacrificing ratio)    

 

Working Note: –

Distribution of C’s share of Goodwill
C’s share of Goodwill = 2,000

A’s get share of Goodwill=2,000X3
5
 =1,200  

 

B’s get share of Goodwill=2,000X2
5
 =800  

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Case B

DateParticulars
L.F.DebitCredit
 Cash A/cDr 2,100 
 To Premium for Goodwill A/c   2,100
 (Being C brought his share of goodwill)    
 Premium for Goodwill A/cDr 2,100 
 To B’s Capital A/c   1,400
 To C’s Capital A/c   700
 (Being goodwill distributed among the old partners’ in their sacrificing ratio)    

Working Note: –

Sacrificing Ratio of A and B=1:1
612
 =2:1
1212
 =2:1

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Distribution of C’s share of Goodwill
C’s share of Goodwill = 2,100

A’s get share of Goodwill=2,100X2
3
 =1,400  

 

B’s get share of Goodwill=2,100X1
3
 = 700
  

 

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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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

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