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

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

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

Free Accounting book Solution - Class 11 and Class 12

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.

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.

 

What is Partnership – Meaning and its Types

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)

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

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

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