Question 38 Chapter 5 - Unimax Class 12 Part 1 - 2021

Question 38 Chapter 5 – Unimax Class 12 Part 1 – 2021

Table of Contents

The solution of Question 38 Chapter 5 – Unimax Class 12 Part 1

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

38. A and B are partners with capitals of Rs. 26000 and Rs. 22000 respectively. They admit C as a new partner with 1/4th share in the profits of the firm. C brings Rs. 26000 as his share of capital. Pass necessary journal entries regarding goodwill.

Ads loading…

The solution of Question 38 Chapter 5 – Unimax Class 12 Part 1

Journal

Date	Particulars		L.F.	Debit	Credit
	Cash a/c	Dr.		26,000
	To C’s Capital a/c				26,000
	(Being capital brought in cash by new partner)
	C’s Capital a/c	Dr.		7,500
	To A’s Capital a/c				3,750
	To B’s Capital a/c				3,750
	(Being compensation paid by C to A and B for his share of goodwill)

Working Note :
Total Capital = 26000 X 4/1
= Rs. 1,04,000
(Hidden) Share of G. W. = 1,04,000 – (26000 + 22000 + 26000)
= 1,04,000 – 74000
= Rs. 30,000
Share of C’s goodwill = 30,000 X ¼ = Rs. 7,500
If nothing has been mentioned in deed, it is assumed that partners will share profits equally and sacrifice in equal ratio.