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Question 35 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

The solution of Question 34 Chapter 5 of +2-A - T.S. Grewal +2 Book 2019 with the explanation of all transactions to understand better.
The solution of Question 34 Chapter 5 of +2-A - T.S. Grewal +2 Book 2019 with the explanation of all transactions to understand better.

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Question 35 Chapter 5 of +2-A

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35. A and B are partners sharing profits and losses in the ratio of 3: 2. They admit C as a partner in the firm for 1/4th share in profits which he takes 1/6th from A and 1/12th from B. C brings in only 60% of his share of the firm’s goodwill. Goodwill of the firm has been valued at 1,00,000. Pass necessary journal entries to record this arrangement.

The solution of Question 35 Chapter 5 of +2-A: –

DateParticulars
L.F.DebitCredit
 Bank A/cDr 15,000 
 To Premium for Goodwill A/c  15,000
 (Being C brought his share of capital and goodwill)   
     
 premium for Goodwill A/cDr 15,000 
 C’s Capital A/cDr 10,000 
 To A’s Capital A/c   16,667
 To B’s Capital A/c   8,333
 (Being goodwill brought by C distributed among the old partners and balance amount of goodwill adjusted with C’s Capital a/c)   

Working Note: –

Old Ratio of A and B = 3:2

C get his share from the A=1
6
 =2
  12

 

C get his share from the B=1
12

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Sacrificing Ratio of X and Y=2: 1

 

Firm’s Share of Goodwill  = 1,00,000

C’s Share of Goodwill=Firm’s Goodwill xC’s share
    
 =10,000X1
4
 =25,000
  

 

B will get a share of Goodwill

=C’s Goodwill  X Sacrifice share of B

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Share of Goodwill received in cash=25,000X60
100
 =15,000
  

C’s Share of Goodwill = 25,000

Sacrificing Ratio of X and Y = 2:1 

A will get a share of Goodwill=C’s Goodwill xSacrifice share of A
    
 =25,000X2
3
 =16,667
 
B will get a share of Goodwill=C’s Goodwill xSacrifice share of B
    
 =25,000X1
3
 =8,337

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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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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