Question 37 Chapter 5 of +2-A - T.S. Grewal 12 Class Part

Question 37 Chapter 5 of +2-A

Table of Contents

The solution of Question 37 Chapter 5 of +2-A: –

T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

37. A and B are partners sharing profits in the ratio of 3 : 2. Their books show
goodwill at 2,000. C is admitted as partner for 1/4th share of profits and brings in 10,000 as his capital but is not able to bring in cash for his share of goodwill 3,000. Draft Journal entries.

The solution of Question 37 Chapter 5 of +2-A: –

Date	Particulars		L.F.	Debit	Credit
	A’s Capital A/c	Dr		1,200
	B’s Capital A/c	Dr		800
	To Goodwill A/c				2,000
	(Being goodwill written off which is already in the books)
	Cash A/c	Dr		10,000
	To C’s Capital A/c				10,000
	(Being C brought his share of goodwill)
	C’s Capital A/c	Dr		3,000
	To A’s Capital A/c				1,800
	To B’s Capital A/c				1,200
	(Being C’s share of goodwill adjusted with his capital account )

Working Note: –

Goodwill in the books = 2,000

A’s share of Goodwill	=	2,000	X	3
				5
	=	1,200

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B’s share of Goodwill	=	2,000	X	2
				5
	=	800

Sacrificing Ratio of A and B=3 : 2

A will get Share of Goodwill	=	C’s Goodwill X	Sacrifice share of A

=	3,000	X	3
			5
=	1,800

B will get Share of Goodwill	=	C’s Goodwill x	Sacrifice share of B

=	3,000	X	2
			5
=	1,200

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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. 8 – Company Accounts – Accounting for Share Capital
Chapter No. 9 – Company Accounts – Issue of Debentures
Chapter No. 10 – Redemption of Debentures

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

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