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

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

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

Free Accounting book Solution - Class 11 and Class 12

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.

 

What is Partnership – Meaning and its Types

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

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)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

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