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Question 28 Chapter 5 – Unimax Class 12 Part 1 – 2021
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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.
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What is Partnership – Meaning and Its 4 Types
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. 8 – Company Accounts – Accounting for Share Capital
- Chapter No. 9 – Company Accounts – Issue of Debentures
- Chapter No. 10 – Redemption of Debentures
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
Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication