# Question 26 Chapter 5 of +2 Part-1 – USHA Publication 12 Class Part – 1

Q-26. - CH-2 - Usha +2 Book 2018 - Solution

Question 26 Chapter 5 of +2-Part-1

26.( Different cases of goodwill) A and B shared profits in the proportion of 3 and 2 had capitals of Rs. 20,000 and Rs. 15,000 respectively. They agree tp admit C into partnership on the following terms for a third share in the future profits :

1. That C should bring in Rs. 20,000 as capital.
2. That as C is unable to bring his share of goodwill in cash the goodwill of the firm be valued at Rs. 15,000. set out the journal entries required , the capital accounts of partners. State the future profit sharing proportion of the partners.

We are providing a solution of Question 26 Chapter 5 of +2 Part-1 in two formats. one is in Video format and another is in article format. Check out both formats as follows:

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The video consists solution of question numbers from 24 to 32 Chapter no. 5 class 12 of Usha publication. To check the direct solution of question no. 26 from the flowing video by using time stamps of the video.

## The solution of Question 26 Chapter 5 of +2 Part-1: –

 Journal Date Particulars L.F. Debit Credit i) Cash A/c Dr. 20,000 To Goodwill A/c 20,000 (Being existing goodwill written off . ) ii) C’s current A/c Dr. 5,000 To A’s Capital A/c 3,000 To B’s Capital A/c 2,000 (Being C’s share in goodwill adjusted in 3:2)

NOTE: Goodwill not brought in cash is adjusted through the current account of new partner due to provisions of AS-26

 Partners’ Capital Account Particulars A B C Particulars A B C To A’s capital A/c 3,000 To Balance b/d 20,000 15,000 To B’s Capital A/c 2,000 To Cash A/c 20,000 To C’s capital A/c 3,000 2,000 To Balance c/d 23,000 17,000 15,000 23,000 17,000 15,000 23,000 17,000 15,000

Calculation of new profit sharing ratio

Let total profit of the firm = Re.1

 Share of profit acquired by C = 1 3
 Remaining share = 1 – 1 3 = 2 3
 A’s New share = 3 x 2 5 3 = 6 15
 B’s New share = 2 x 2 5 3 = 4 15

 C’s share = 1 or 5 3 15
 New Ratio = 6 : 4 : 5 15 15 15 = 6 : 4 : 5

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