Question 32 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 32 Chapter 5 – Unimax Class 12 Part 1 – 2021

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The solution of Question 32 Chapter 5 – Unimax Class 12 Part 1

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

32. M and N are partners sharing profits and losses in the ratio of 2 : 1. They admit P into partnership for 1/4th share, which he acquires equally from M and N. P brings Rs. 35,000 for Capital and Rs. 15,000 as his share of goodwill. Pass necessary journal entries if M withdraws ½ and N withdraws 1/3rd of the amount of goodwill credited to them.

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The solution of Question 32 Chapter 5 – Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Cash a/c	Dr.		50,000
	To P’s Capital a/c				35,000
	To Premium a/c				15,000
	(Being goodwill and capital brought in cash by new partner)
	Premium a/c	Dr.		15000
	To M’s Capital a/c				7,500
	To N’s Capital a/c				7,500
	(Being goodwill brought by new partner credited to old partners a/c in sacrificing ratio
	M’s Capital a/c	Dr.		3750
	N’s Capital a/c	Dr.		2500
	To Cash a/c				6250
	(Being ½ by M and 1/3 by N goodwill withdrawn by partners)

Let total profit = 1
P’s Share =1/4
Remaining Profit = 1 -1/4=4-1/4=3/4
A’s new share =2/3_[1/2 X 1/4]
=2/3_1/8=16-3/24=13/24
B’s new share =1/3_[1/2 X 1/4]
=1/3_1/8=8-3/24=5/24
A : B : C : D = 13 : 5 : 6
A’s Sacrifice =2/3_13/24
=16-13/24=1/8
B’s Sacrifice =1/3-5/24
=8-5/24=1/8
S.R. = 1 : 1