Question 36 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part

Question 36 Chapter 5 of +2-Part-1

36. (Hidden Goodwill) A and B are partners with capitals of Rs. 8,000 and Rs. 6,000 respectively. They admit C as a partner with 1/4th share in the profit of the firm. C brings Rs. 8,000 as his share of capital. Give journal entries to record goodwill.

The Content covered in this article:

The solution of Question 36 Chapter 5 of +2 Part-1: –
Usha Publication – Accountancy PSEB (Class 12) – Volume I – Solution
Usha Publication – Accountancy PSEB (Class 12) – Volume II – Solution

The solution of Question 36 Chapter 5 of +2 Part-1: –

Journal
Date	Particulars		L.F.	Debit	Credit
2019
i)	Cash A/c	Dr.		8,000
	To C’s Capital A/c				8,000
	(Being cash brought by C as capital )

ii)	C’s capital A/c	Dr.		2,500
	To A’s Capital A/c				1,250
	To B’s Capital A/c				1,250
	(Being C’s share of capital adjusted in sacrificing ratio i.e. equall)

Working notes:

Calculation of hidden Goodwill: Total capital of the firm after C’s admission:
Rs.(8000+6000+8000)= Rs. 22,000

Firm’s capital taking C’s capital as a base	=	4	X	8,000
Firm’s capital taking C’s capital as a base	=	1	X	8,000
	=	Rs 32,000

Hidden Goodwill = Rs.(32,000-22,000)
	=	Rs. 10,000