Question 37 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 37 Chapter 5 of +2-A

Question 37 Chapter 5 of +2-A

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
   

 

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

 

 

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)

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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2 Book 1 min - Question 37 Chapter 5 of +2-A - T.S. Grewal 12 Class Part - A Vol. 1
Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms

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