# Question 45 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question No.45 Chapter No.5 - T.S. Grewal +2 Book 2019-Solution

Question 45 Chapter 5 of +2-A

45. X and Y are partners with capitals of 50,000 each. They admit Z as a partner for 1/4th share in the profits of the firm. Z brings in 80,000 as his share of capital. The Profit and Loss Account showed a credit balance of 40,000 as on the date of admission of Z.
Give necessary journal entries to record the goodwill.

## The solution of Question 45 Chapter 5 of +2-A: –

 Date Particulars L.F. Debit Credit Z’s Current A/c Dr 25,000 To X’s Capital A/c 12,500 To Y’s Capital A/c 12,500 (Being for goodwill distributed in equal ratio)

Total Capital of the firm on the basis of C’sCapital

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

 = 80,000 * 4 1 = 3,20,000

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

 = 50,000+ 50,000+ 40,000+ 40,000 = 2,20,000

 Goodwill = Total Capital of the firm on basis of Cs Capital – Actual Capital of Firm = 3,20,000 -2,20,000 = 1,00,000
 Z’s Share of Goodwill = Firm’s Goodwill  x Share of E’s
 = 1,00,000 X 1 4 = 25,000

Sacrificing Ratio of X and Y = 1 : 1

 X will get Share of Goodwill = Z’s Goodwill  X Sacrifice share of X
 = 25,000 X 1 2 = 12,500

 Y will get Share of Goodwill = Z’s Goodwill  X Sacrifice share of Y
 = 25,000 X 1 2 = 12,500

### 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)

• 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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