Question 33 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 33 Chapter 5 of +2-A

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 Half of their share of premium was withdrawn by A and B from the firm.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  (Being Amount of goodwill withdrawn by A and B)        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  

 

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
   

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)

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

 

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2 Book 1 min - Question 33 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

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