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

Journal
DateParticulars
L.F.DebitCredit
2019     
i)Cash A/cDr. 8,000 
 To C’s Capital A/c   8,000
 (Being cash brought by C as capital )   
     
ii)C’s capital A/cDr. 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=4X8,000
1
 =Rs 32,000  
     
Hidden Goodwill = Rs.(32,000-22,000)    
 =Rs. 10,000  
C’s share of Goodwill=4X10,000
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

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

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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