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Question 34 Chapter 3 of Class 12 Part – 1 VK Publication

Question 34 Chapter 3 of Class 12 Part - 1 VK Publication
Question 34 Chapter 3 of Class 12 Part - 1 VK Publication

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Question 34 Chapter 3 of Class 12 Part – 1

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34. A, B and C were partners in a firm sharing profits in the ratio of 1:3:2. They decided that with effect from 1st April, 2018, they will share profits in the ratio of 4:6:5. For this purpose, the goodwill of the firm is valued at the total of previous three years’ profits. The profits Were:

YearRs.
31st March, 201510,000 (Loss)
31st March, 201680,000 (Loss)
31st March, 20171,20,000
31st March, 20181,40,000

Reserves and accumulated profits appeared in the Balance Sheet at Rs. 40,000 and Rs. 30,000 respectively. Partners neither want to show goodwill in the books nor want to distribute the reserves and profits appearing in the Balance Sheet. Pass a single journal entry to record the change.

The solution of Question 34 Chapter 3 of Class 12 Part – 1: –

Journal Entry

Date

Particulars

 

L . FDr. ₹Cr. ₹
2017A’s Capital A/cDr. 25,000 
April 1To B’s Capital A/c   25,000
 ( Being proportionate share of Goodwill , Reserve and P & L adjusted between partners)    

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Working Note: 

Sacrificing Share = Old Share – New Share

Particulars

A

BC
Partners’ Old Ratio1/63/62/6
Partners’ New Ratio4/156/155/15
Difference(-3)/30(-3)/30(Nil)

Amount to be Adjusted:

Profit and Loss AccountRs. 30,000
Reserve =Rs. 40,000
Goodwill =Rs. 1,80,000
 Rs. 2,50,000

Amount of compensation= 2,50,000 x3/30 = Rs. 25,000

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Also, Check out the solved question of previous Chapters: –

Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution

Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

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

+2 Book 1-min
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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