Question 29 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 29 Chapter 5 – Unimax Class 12 Part 1 – 2021

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The solution of Question 29 Chapter 5 – Unimax Class 12 Part 1

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

29. A and B are partners in a firm sharing profits and losses in 3 : 4. They admit C for 3/7th share which he acquires 2/7th from A and 1/7th from B. C brings Rs. 1,500 as premium out of his share of Rs. 2,400. Pass necessary journal entries if capital brought by C is Rs. 10,000.

The solution of Question 29 Chapter 5 – Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Cash a/c	Dr.		11500
	To C’s Capital a/c				10000
	To Premium a/c				1500
	(Being goodwill and capital brought in cash by new partner)
	C’s Capital a/c	Dr.	900
	Premium a/c	Dr.	1500
	To A’s Capital a/c				1600
	To B’s Capital a/c				800
	(Being compensation paid transferred to old partner’s capital a/c in sacrificing ratio)

Working Note
C’s share of G.W = Rs. 2,400
Premium (G.W.) = Rs. 1,500
Compensation through capital = Rs. 2,400 – 1,500 = Rs. 900
Sacrifice of A = 2/1
Sacrifice of B = 1/2
So, S.R. = 2 : 1