# Question 28 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.28 Chapter No.6 - T.S. Grewal +2 Book 2019-Solution

Question 28 Chapter 6 of +2-A

28. Ram, Laxman and Bharat are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of 1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at 2,52,000. Ram and Bharat decided to share future profits in the ratio of 2 : 1. The Profit for the first year after Laxman’s retirement amount to 1,20,000. Give the necessary Journal entries to record goodwill and to distribute the profit. Show your calculations clearly.

## The solution of Question 28 Chapter 6 of +2-A: –

Journal Entries

 Date Particulars L.F. Debit Credit Ram’s Capital A/c Dr. 90,000 Laxman’s Capital A/c Dr. 60,000 Bharat’s Capital A/c Dr. 30,000 To Goodwill A/c 1,80,000 (Being Goodwill written off) Ram’s Capital A/c Dr. 42,000 Bharat’s Capital A/c Dr. 42,000 To Laxman’s Capital A/c 84,000 (Being Adjustment of Laxman ′s share of goodwill) Profit & Loss Appropriation A/c Dr. 1,20,000 To Ram’s Capital A/c 80,000 To Laxman’s Capital A/c 40,000 (Being Profit on revaluation transferred to Partners ′ Capital A/c)

#### Calculation of Ratios

Ram :Laxman :Bharat = 3:2:1(Old ratio)
Ram :Bharat = 2:1(New ratio)
Gaining Ratio = New Ratio − Old Ratio

 Ram’s Gain = 2 – 3 3 6 = 4 – 3 6 = 1 6
 Bharat’s Gain = 1 – 1 3 6 = 2 – 1 6 = 1 6

#### Calculation of Retiring Partner’s Share of Goodwill

 Laxman’s share of goodwill = 2,52,000 X 2 6 = Rs 84,000

Laxman’s share of goodwill will be brought by Ram and Bharat in their gaining ratio1:1

 Therefore, Ram’s and Bharat Capital A/c will be debited with = 84,000 X 1 2 = Rs 42,000

#### 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