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

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

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

Free Accounting book Solution - Class 11 and Class 12

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)

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)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

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