Question 41 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 41 Chapter 5 of +2-A

Question 41 Chapter 5 of +2-A

41. Anil and Sunil are partners in a firm with fixed capitals of 3,20,000 and
2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April, 2012. Charu brought 3,20,000 as her share of capital.
Calculate value of goodwill and record necessary Journal entries

The solution of Question 41 Chapter 5 of +2-A: –

 

Date Particulars
L.F. Debit Credit
  Bank A/c Dr   3,20,000  
  To Charu’s Capital A/c       3,20,000
  (Being Charu’s share of goodwill adjusted with his capital account)        
  Charu’s Current A/c Dr   1,00,000  
  To Anil’s Capital A/c       50,000
  To Sunil’s Capital A/c       50,000
  (Being Charu’s share of goodwill adjusted through current accounts)        

 

Working Note: –

Total Capital of the firm on the Basis of Charu’s Capital

Total Capital of the firm = Charu’s Capital * Reciprocal of his share

  = 3,20,000 * 4
1
  = 12,80,000
   


Actual Capital of Firm = Capital of Old Partners + Incoming Partner’s Capital

  = 3,20,000 + 2,40,000 + 3,20,000
  = 8,80,000

 

Goodwill = Total Capital of the firm
on basis of Charu’s Capital
– Actual Capital of Firm
  = 12,80,000 +8,80,000
  = 4,00,000  
Charu’s Share of Goodwill = Firm’s Goodwill  x  Share of E’s
  = 4,00,000 X 1
4
  = 1,00,000
   

Sacrificing Ratio of Anil and Sunil = 1 : 1 

Anil will get Share of Goodwill = Charu’s Goodwill  x  Sacrifice share of A
  = 1,00,000 X 1
2
  = 50,000
 

 

Sunil will get Share of Goodwill = Charu’s Goodwill  x  Sacrifice share of A
       
  = 1,00,000 X 1
2
  = 50,000

 

 

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 41 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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