Question 47 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 47 Chapter 5 of +2-A

Question 47 Chapter 5 of +2-A

47. Verma and Sharma are partners in a firm sharing profits and losses in the
ratio of 5 : 3. They admitted Ghosh as a new partner for 1/5th share of profits. Ghosh is to bring in 20,000 as capital and 4,000 as his share of goodwill premium. Give the necessary Journal entries:
(a) When the amount of goodwill is retained in the business.
(b) When the amount of goodwill is fully withdrawn.
(c) When 50% of the amount of goodwill is withdrawn.
(d) When goodwill is paid privately.

The solution of Question 47 Chapter 5 of +2-A: –

 

(a) When the amount of goodwill is retained in the business.

Date Particulars
L.F. Debit Credit
  Cash A/c Dr   24,000  
  To Ghosh’s Capital A/c       20,000
  To Premium for Goodwill A/c       4,000
  (Being share of capital and goodwill brought by the Ghosh)        
  Premium for Goodwill A/c Dr   4,000  
  To Verma’s Capital A/c       2,500
  To Sharma’s Capital A/c       1,500
  (Being goodwill distributed among the old partners)        

(b) When the amount of goodwill is fully withdrawn.

Date Particulars
L.F. Debit Credit
  Cash A/c Dr   24,000  
  To Ghosh’s Capital A/c       20,000
  To Premium for Goodwill A/c       4,000
  (Being share of capital and goodwill brought by the Ghosh)        
  Premium for Goodwill A/c Dr   4,000  
  To Verma’s Capital A/c       2,500
  To Sharma’s Capital A/c       1,500
  (Being goodwill distributed among the old partners)        
  Verma’s Capital A/c Dr   2,500  
  Sharma’s Capital A/c Dr   1,500  
  To Cash A/c       4,000
  (Being Amount of Premium for Goodwill withdrawn by Old
Partners)
       


(c) When 50% of the amount of goodwill is withdrawn.

Date Particulars
L.F. Debit Credit
  Cash A/c Dr   24,000  
  To Ghosh’s Capital A/c       20,000
  To Premium for Goodwill A/c       4,000
  (Being share of capital and goodwill brought by the Ghosh)        
  Premium for Goodwill A/c Dr   4,000  
  To Verma’s Capital A/c       2,500
  To Sharma’s Capital A/c       1,500
  (Being goodwill distributed among the old partners)        
  Verma’s Capital A/c Dr   1,250  
  Sharma’s Capital A/c Dr   750  
  To Cash A/c       2,000
  (Being Amount of Premium for Goodwill withdrawn by Old
Partners)
       

 

(d) When goodwill is paid privately.

No Journal entry will be recorded in the books because goodwill paid privately.

 

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 47 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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