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Question 34 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 34 Chapter 5 of +2-A

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Question 34 Chapter 5 of +2-A

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34. A and B are partners sharing profits in the ratio of 2 : 1. They admit C for 1/4th share in profits. C brings in 30,000 for his capital and 8,000 out of his share of 10,000 for goodwill. Before admission, goodwill appeared in books at 18,000. Give Journal entries to give effect to the above arrangement.

 

The solution of Question 34 Chapter 6 of +2-A

DateParticulars
L.F.DebitCredit
 A’s Capital A/cDr 12,000 
 B’s Capital A/cDr 6,000 
 To Cash A/c   18,000
 (Being C brought his share of capital and goodwill)    
 Cash A/cDr 38,000 
 To C’s capital A/c   30,000
 To Premium for Goodwill A/c   8,000
 (Being C brought his share of capital and goodwill)    
 Premium for Goodwill A/cDr 8,000 
 C’s Capital A/cDr 2,000 
 To A’s Capital A/c   6,667
 To B’s Capital A/c   3,333
 (Being goodwill brought by C distributed among the old partners and balance amount of goodwill adjusted with C’s Capital a/c)    

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Goodwill in the books  = 18,000

A’s share of Goodwill=18,000X2
3
 =12,000
  

 

B’s share of Goodwill=18,000X1
3
 =6,000
  

 

C’s Share of Goodwill = 10,000

Sacrificing Ratio of X and Y=2 : 1sacrificing ratio is equal to old ratio because there no other condition for sacrificing old partners’ share. They will sacrifice in their old ratio

 

 

A will get Share of Goodwill=C’s Goodwill  x Sacrifice share of A
    
 =10,000X2
3
 =6,667
  

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B will get Share of Goodwill

=C’s Goodwill  X Sacrifice share of B
 =10,000X1
3
 =3,333
  

 

 

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

 

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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