Question 33 Chapter 5 of +2-A
33. A and B were partners in a firm sharing profits and losses in the ratio of 3 : 2. They admitted C as a new partner for 3/7th share in the profit and the new profit-sharing ratio will be 2 : 2 : 3. C brought 2,00,000 as his capital and 1,50,000 as premium for goodwill. Half of their share of premium was withdrawn by A and B from the firm. Calculate sacrificing ratio and pass necessary Journal entries for the above transactions in the books of the firm.
The solution of Question 33 Chapter 6 of +2-A
| Date | Particulars |
L.F. | Debit | Credit | |
| Cash A/c | Dr | 3,50,000 | |||
| To C’s capital A/c | 2,00,000 | ||||
| To Premium for Goodwill A/c | 1,50,000 | ||||
| (Being C brought his share of capital and goodwill) | |||||
| Premium for Goodwill A/c | Dr | 1,50,000 | |||
| To A’s Capital A/c | 1,10,000 | ||||
| To B’s Capital A/c | 40,000 | ||||
| (Being goodwill brought by C distributed among the old partners) | |||||
| A’s Capital A/c | Dr | 55,000 | |||
| B’s Capital A/c | Dr | 20,000 | |||
| To Cash A/c | 75,000 | ||||
| (Being Amount of goodwill withdrawn by A and B) | |||||
| Old Ratio of A and B | = | 3 : 2 |
| New Ratio of A, B, and C | = | 2 : 2 : 3 |
Sacrificing Share = Old Ratio – New Ratio
| A’s New Ratio | = | 3 | – | 2 |
| 5 | 7 |
| = | 21 – 10 | |
| 35 |
| = | 11 | Sacrifice | |
| 35 |
| B’s Sacrificing Share | = | 2 | – | 2 |
| 5 | 7 |
| = | 14 – 10 | |
| 35 |
| = | 4 | Sacrifice | |
| 35 |
| C’s Share of Goodwill | = | 1,50,000 |
| Sacrificing Ratio of X and Y | = | 11 : 4 |
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|
A will get Share of Goodwill |
= | C’s Goodwill x | Sacrifice share of A |
| = | 1,50,000 | X | 11 | |
| 15 | ||||
| = | 1,10,000 |
| B will get Share of Goodwill | = | C’s Goodwill x | Sacrifice share of B |
| = | 1,50,000 | X | 4 | |
| 15 | ||||
| = | 40,000 |
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Amount of goodwill withdrawal by the old partners
|
A will withdrawal Goodwill |
= | A’s Share Goodwill X | Half amount withdrawal |
| = | 1,10,000 | X | 1 | |
| 2 | ||||
| = | 55,000 |
|
B will withdrawal Goodwill |
= | B’s Share Goodwill X | Half amount withdrawal |
| = | 40,000 | X | 1 | |
| 2 | ||||
| = | 20,000 |
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
