# 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.

Question 35 Chapter 5 of +2-A

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: –

 Date Particulars L.F. Debit Credit Bank A/c Dr 15,000 To Premium for Goodwill A/c 15,000 (Being C brought his share of capital and goodwill) premium for Goodwill A/c Dr 15,000 C’s Capital A/c Dr 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

 Sacrificing Ratio of X and Y = 2: 1

Firm’s Share of Goodwill  = 1,00,000

 C’s Share of Goodwill = Firm’s Goodwill x C’s share
 = 10,000 X 1 4 = 25,000

 B will get a share of Goodwill = C’s Goodwill  X Sacrifice share of B

 Share of Goodwill received in cash = 25,000 X 60 100 = 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 x Sacrifice share of A
 = 25,000 X 2 3 = 16,667
 B will get a share of Goodwill = C’s Goodwill x Sacrifice share of B
 = 25,000 X 1 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)

• 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