# Question 29 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.29 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

Question 29 Chapter 5 of +2-A

29. A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit C into partnership for 1/5th share. C brings 30,000 as capital and 10,000 as goodwill. At the time of admission of C, goodwill appeared in the Balance Sheet of A and B at 3,000. New profit-sharing ratio of the partners will be 5 : 3 : 2. Pass necessary Journal entries.

The solution of Question 29 Chapter 6 of +2-A

 Date Particulars L.F. Debit Credit A’s Capital A/c Dr 1,800 B’s Capital A/c Dr 1,200 To Goodwill A/c 3,000 (Being goodwill written off which is already in the books) Bank A/c Dr 40,000 To C’s Capital A/c 30,000 To Premium for Goodwill A/c 10,000 (Being C brought his share of capital and goodwill) Premium for Goodwill A/c Dr 10,000 To A’s Capital A/c 5,000 To B’s Capital A/c 5,000 (Being goodwill distributed among the old partners’ in their sacrificing ratio)

 Old Ratio of A and B = 3 : 2 New Ratio of A, B, and C = 5 : 3 : 2

Sacrificing Share = Old Ratio – New Ratio

 A’s Sacrificing Share = 3 – 5 5 10
 = 6 – 5 10
 = 1 Sacrifice 10

 B’s Sacrificing Share = 2 – 3 5 10
 = 4 – 3 10

 = (-1) Gains 10

 Total Firm’s Goodwill = 3,000
 A’s share of Goodwill = 3,000 X 3 5 = 1,800

 B’s share of Goodwill = 3,000 X 2 5 = 1,200

Sacrifice Ratio = 1 : 1
Distribution of C’s share of Goodwill
Share of Goodwill = C’s Goodwill  X Partners’ Sacrifice share

 A’s and B’s Share of Goodwill = 10,000 X 1 2 = 5,000

### 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