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

Question 36 Chapter 5 of +2- Part-

Question 36 Chapter 5 of +2-Part-1

Free Accounting book Solution - Class 11 and Class 12

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    

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

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

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

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2 Book 1 min - Question 36 Chapter 5 of +2 Part-1 - USHA Publication 12 Class Part - 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firm

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