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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

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

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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

DateParticulars L.F.Debit Credit
 Cash a/cDr. 26,000 
     To C’s Capital a/c   26,000
 (Being capital brought in cash by new partner)    
 C’s Capital a/cDr. 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.

 

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