# Question 31 Chapter 5 – Unimax Class 12 Part 1 – 2021

Question 31 Chapter 5 – Unimax Class 12 Part 1 – 2021

31. A and B are partners sharing profits and losses in ratio of 3 : 2. Their books showed goodwill at Rs. 20,000. C is admitted with 1/5th share which he acquires equally from A and B. C brings Rs. 30,000 as his capital and Rs. 15,000 as his share of goodwill. Profit at the end of the year amounted to Rs. 1,00,000. Give journal entries to carry out above arrangement.

## The solution of Question 31 Chapter 5 – Unimax Class 12 Part 1

Journal

 Date Particulars L.F. Debit Credit A’s Capital a/c Dr. 1200 B’s Capital a/c Dr. 800 To Goodwill a/c 2000 (Being old goodwill w/o by old partner’s in old ratio) Cash a/c Dr. 10000 To C’s Capital a/c 10000 To Premium a/c (Being goodwill and capital brought in cash by new partner) Premium a/c Dr. 3000 To A’s Capital a/c 1800 To B’s Capital a/c 1200 (Being goodwill credited to old partners’ capital a/c in sacrificing ratio)

Journal

 Date Particulars L.F. Debit Credit Profit and Loss Appropriation a/c Dr. 1,00,000 To A’s Capital a/c 50,000 To B’s Capital a/c 30,000 To C’s Capital a/c 20,000 (Being profit distributed among partner in new profit sharing ratio)

Working Note
Let Total Profit = 1
C’s Share = 1/5
Remaining Share = 1 – 1/5 = 4/5
A’s new share =3/5_[1/2 X 1/5]
= 5/10
B’s new share =2/5_[1/2 X 1/5]
=2/5_1/10=4-1/10=3/10
New PSR =5/10: 3/10: 1/5
= 5 : 3 : 2
A’s share = 3/5 – 5/10 = 1/10
B’s share = 2/5 – 3/10 = 1/10
S.R. = 1 : 1

What is Partnership – Meaning and its Types

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)