# Question 40 Chapter 5 – Unimax Class 12 Part 1 – 2021

Question 40 Chapter 5 – Unimax Class 12 Part 1 – 2021

40. P and Q are in partnership sharing profit and loss in 3 : 1. They admit R into the firm, R paying a premium of Rs. 15000 for 1/3rd share of the profits. As between themselves, P and Q agree to share future profits and losses equally. Pass necessary journal entries.

## The solution of Question 40 Chapter 5 – Unimax Class 12 Part 1

Journal

 Date Particulars L.F. Debit Credit Cash a/c Dr. 15,000 To Premium a/c 15,000 (Being goodwill brought in cash by new partner) 10,000 Premium a/c Dr. 15,000 To P’s Capital a/c 15,000 (Being goodwill brought by new partners credited to sacrificing partners’ capital a/c) Q’s Capital a/c 3,750 To P’s Capital a/c 3,750 (Being compensation paid by Q to P for his gaining share)

Working Note
Let total profit = 1
R’s Share =1/3
Remaining Share = 1 -1/3 =3-1/3 =2/3
P’s new share =1/2 X 2/3
=1/3
Q’s new share =1/2 X 2/3 =1/2
New PSR = 1 : 1 : 1
P’s Sacrifice =3/4_1/3 =5/12
Q’s Sacrifice =1/4_1/3 =5/12
So P has made sacrifice 5/12 of his share
Total goodwill of firm = Rs. 15000 X 3/1 = Rs. 45000
Q’s compensation = 45000 X 1/12 = Rs. 3750

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)