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

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

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Question 29 Chapter 5 of +2-A

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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

DateParticulars
L.F.DebitCredit
 A’s Capital A/cDr 1,800 
 B’s Capital A/cDr 1,200 
 To Goodwill A/c   3,000
 (Being goodwill written off which is already in the books)    
 Bank A/cDr 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/cDr 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)    

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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=35
510
 =6 – 5
10
 =1 Sacrifice
 10

 

B’s Sacrificing Share=23
510
 =4 – 3
10

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 =(-1)Gains
 10

 

Total Firm’s Goodwill=3,000
A’s share of Goodwill=3,000X3
5
 =1,800
  

 

B’s share of Goodwill=3,000X2
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=10,000X1
2
 =5,000
  

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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)

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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