Question 30 Chapter 5 of +2-A
30. Anu and Bhagwan were partners in a firm sharing profits in the ratio of 3 : 1. Goodwill appeared in the books at 4,40,000. Raja was admitted to the partnership. The new profit-sharing ratio among Anu, Bhagwan and Raja was 2 : 2 : 1. Raja brought 1,00,000 for his capital and necessary cash for his goodwill premium. Goodwill of the firm was valued at 2,50,000.
Record necessary Journal entries in the books of the firm for the above transactions.
The solution of Question 30 Chapter 6 of +2-A
| Date | Particulars |
L.F. | Debit | Credit | |
| Anu’s Capital A/c | Dr | 3,30,000 | |||
| Bhagwan’s Capital A/c | Dr | 1,10,000 | |||
| To Goodwill A/c | 4,40,000 | ||||
| (Being goodwill written off which is already in the books) | |||||
| Bank A/c | Dr | 1,50,000 | |||
| To Raja’s Capital A/c | 1,00,000 | ||||
| To Premium for Goodwill A/c | 50,000 | ||||
| (Being C brought his share of capital and goodwill) | |||||
| Premium for Goodwill A/c | Dr | 50,000 | |||
| Bhagwan’s Capital A/c | Dr | 37,500 | |||
| To Anu’s Capital A/c | 87,500 | ||||
| (Being goodwill brought by Raja and share goodwill adjusted from the bhagwan’s capital account because he is gaining partner) | |||||
| Old Ratio of Anu and Bhagwan | = | 3 : 1 |
| New Ratio of Anu, Bhagwan and Raja | = | 2 : 2 : 1 |
Sacrificing Share = Old Ratio – New Ratio
| Anu’s Sacrificing Share | = | 3 | – | 2 |
| 4 | 5 |
| = | 15 – 8 | |
| 20 |
| = | 7 | Sacrifice |
|
| 20 |
| Bhagwan’s Sacrificing Share | = | 1 | – | 2 |
| 4 | 5 |
| = | 5 – 8 | |
| 20 |
| = | (-3) | Gains | |
| 20 |
| Goodwill in the books | = | 4,40,000 |
| Anu’s share of Goodwill | = | 4,40,000 | X | 3 |
| 4 | ||||
| = | 3,30,000 |
| Bhagwan’s share of Goodwill | = | 4,40,000 | X | 1 |
| 4 | ||||
| = | 1,10,000 |
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| Anu’s share of Goodwill | = | 4,40,000 | X | 3 |
| 4 | ||||
| = | 3,30,000 |
Firm’s Goodwill
Raja’s Share of Goodwill = Firm’s Goodwill X Raja’s share
| Raja’s Share of Goodwill | = | Firm’s Goodwill X | Raja’s share |
| = | 2,50,000 | X | 1 | |
| 5 | ||||
| = | 50,000 |
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| Bhagwan’s Share of Goodwill | = | Firm’s Goodwill X | Raja’s share |
| = | 2,50,000 | X | 3 | |
| 5 | ||||
| = | 37,500 |
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
