# Question 25 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.25 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

Question 25 Chapter 5 of +2-A

25. A and B are in partnership sharing profits and losses in the ratio of 5 : 3. C is admitted as a partner who pays 40,000 as capital and the necessary amount of goodwill which is valued at 60,000 for the firm. His share of profits will be 1/5th which he takes 1/10th from A and 1/10th from B.
Give Journal entries and also calculate future profit-sharing ratio of the partners.

The solution of Question 25 Chapter 6 of +2-A

 Date Particulars L.F. Debit Credit Cash A/c Dr 52,000 To C’s Capital A/c 40,000 To Premium for Goodwill A/c 12,000 (Being C brought his share of goodwill) Premium for Goodwill A/c Dr 12,000 To A’s Capital A/c 6,000 To B’s Capital A/c 6,000 (Being goodwill distributed among the old partners’ in their sacrificing ratio)

Working Note: –

 Old Ratio of A and B = 5 : 3 Sacrificing Ratio of A and B = 1/10 : 1/10

New Share = Old Ratio – Sacrificing Ratio

 A’s New Share = 5 – 1 8 10
 = 25 – 4 40
 = 21 40

 B’s Sacrificing Share = 3 – 1 8 10
 = 15 – 4 40

 = 11 40

 New Ratio of A, B and C = 21 : 11 : 1 40 40 5
 = 21 : 11 : 8 40 40 40 = 21 : 11 : 8

Distribution of C’s share of Goodwill
C’s share of Goodwill

 A &B will get share of Goodwill = New Partner’s Share of Goodwill X Sacrificing Ratio
 = 12,000 X 1 2 = 6000 each

### 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