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

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

Journal
Date	Particulars		L.F.	Debit	Credit
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
		1
	=	Rs 32,000
Hidden Goodwill = Rs.(32,000-22,000)
	=	Rs. 10,000

C’s share of Goodwill	=	4	X	10,000
		1
	=	Rs 2,500

Thanks, Please Like and share with your friends  
Comment if you have any questions.

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

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

• Chapter No. 1 – Accounting Not for Profit Organisations
• Chapter No. 2 – Partnership Accounts – I (Introduction)
• Chapter No. 3 – Partnership Accounts – II (Goodwill: Nature and Valuation)
• Chapter No. 4 – Partnership Accounts – III (Reconstitution of Partnership)
• Chapter No. 5 – Partnership Accounts – IV (Admission of A Partner)
• Chapter No. 6 – Partnership Accounts – V (Retirement and Death of A Partner)
• Chapter No. 7 – Partnership Accounts – VI (Dissolution of Partnership Firm)
• Chapter No. 8 – Company Accounts (Share Capital)
• Chapter No. 9 – Company Accounts (Issue of Debentures)
• Chapter No. 10 – Company Accounts (Redemption of Debentures)

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

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis
• Chapter No. 3 –  Tools of Financial Statement Analysis- Comparative and Common Size
• Chapter No. 4 – Ratio Analysis
• Chapter No. 5 – Cash Flow Statement

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