Question 31 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 31 Chapter 5 of +2-A

Question 31 Chapter 5 of +2-A

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)

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 - Question 31 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

Leave a Reply

This site uses Akismet to reduce spam. Learn how your comment data is processed.