Question 31 Chapter 5 of +2-A
Table of Contents
31. X and Y are partners in a firm sharing profits in the ratio of 3 : 2. On 1st April, 2019, they admit Z as a partner for 1/4th share in the profits. Z contributed following assets towards his capital and for his share of goodwill: Stock 60,000; Debtors 80,000; Land 1,00,000, Plant and Machinery 40,000.On the date of admission of Z, the goodwill of the firm was valued at 6,00,000.Pass necessary Journal entries in the books of the firm on Z’s admission.
The solution of Question 31 Chapter 6 of +2-A
| Date | Particulars |
L.F. | Debit | Credit | |
| Stock A/c | Dr | 60,000 | |||
| Debtors A/c | Dr | 80,000 | |||
| Land A/c | Dr | 1,00,000 | |||
| Plant and Machinery A/c | Dr | 40,000 | |||
| To Z’s capital A/c | 1,30,000 | ||||
| To Premium for Goodwill A/c | 1,50,000 | ||||
| (Being Z brought his share of capital and goodwill) | |||||
| Premium for Goodwill A/c | Dr | 1,50,000 | |||
| To X’s Capital A/c | 90,000 | ||||
| To Y’s Capital A/c | 60,000 | ||||
| (Being goodwill brought by Z distributed among the old partners) | |||||
| Firm’s Goodwill | = | 6,00,000 |
| Z’s Share of Goodwill | = | Firm’s Goodwill X Raja’s share |
| = | 6,00,000 | X | 1 | |
| 4 | ||||
| = | 1,50,000 |
| Sacrificing Ratio of X and Y | = | 3 : 2 | sacrificing ratio is equal to old ratio because there no other condition for sacrificing old partners’ share. They will sacrifice in their old ratio |
| X’s will get Share of Goodwill | = | Z’s Goodwill X | Sacrifice share of X |
| = | 1,50,000 | X | 3 | |
| 5 | ||||
| = | 90,000 |
| Y’s will get Share of Goodwill | = | Z’s Goodwill X | Sacrifice share of Y |
| = | 1,50,000 | X | 2 | |
| 5 | ||||
| = | 60,000 |
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. 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
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