Question 30 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 30 Chapter 5 of +2-A

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
   

 

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
   

 

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)

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

 

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2 Book 1 min - Question 30 Chapter 5 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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