# Question 22 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.22 Chapter No.6 - T.S. Grewal +2 Book 2019-Solution

Question 22 Chapter 6 of +2-A

22. A, B, and C were partners in a firm sharing profits in the ratio of 6: 5: 4. Their capitals were A − 1,00,000; B − 80,000 and C − 60,000 respectively. On 1st April 2009, A retired from the firm and the new profit sharing ratio between B and C was decided as 1: 4. On A’s retirement, the goodwill of the firm was valued at 1,80,000. Showing your calculations clearly, pass the necessary Journal entry for the treatment of goodwill on A’s retirement.

## The solution of Question 22 Chapter 6 of +2-A: –

 Date Particulars L.F. Debit Credit C’s Capital A/c Dr 96,000 To A’s Capital A/c 72,000 To B’s Capital A/c 24,000 (Being Adjustment of A′s and B′s share of goodwill)

Working Note: –

#### i. Calculation of B’s share of goodwill

A :B :C = 6:5:4(Old ratio)
B :C=1:4 (New ratio)

#### ii Gaining Ratio

 B’s Gain = 1 – 5 5 15 = 3 – 5 15 = 2 15
 C’s Gain = 4 – 4 5 15 = 12 – 4 15 = 8 15

A:C = 2: 8

#### Calculation of Retiring Partner’s Share of Goodwill

 A’s share of goodwill = 1,80,000 X 6 15 = Rs 72,000

 B’s share of goodwill = 1,80,000 X 2 15 = Rs 24,000

A’s and B’s share of goodwill be brought by C only
Therefore, C’s Capital A/c will be debited with 72,000+24,000 = Rs 96,000

#### 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