Question 28 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 28 Chapter 5 – Unimax Class 12 Part 1 – 2021

Table of Contents

The solution of Question 28 Chapter 5 – Unimax Class 12 Part 1

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

28. P and Q were partners sharing profits and losses in 7 : 3. R was admitted as a new partner and new profit sharing ratio was 5 : 3 : 2. R was unable to pay cash for goodwill. Instead he gave stock Rs. 20,000 and furniture Rs. 15,000 for his share of goodwill. Apart from this he paid Rs. 70,000 for his capital. Pass necessary journal entries.

The solution of Question 28 Chapter 5 – Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Cash a/c	Dr.		70000
	Stock a/c	Dr.		20000
	Furniture a/c	Dr.		15000
	To Premium a/c				35000
	To R’s Capital a/c				70000
	(Being asset contributed as goodwill and capital brought in cash by new partner)
	Premium a/c	Dr.		35000
	To P’s Capital a/c				35000
	(Being goodwill credited to old partners’ capital a/c in their sacrificing ratio)

Working Note
Calculation of sacrificing ratio
P’s sacrifice = Old Share – Share
=7/10 – 5/10
= 2/10
Q’s sacrifice = 3/10 -3/10
= 0 (no sacrifice)
All the amount of goodwill is credited to P’s Capital A/c.