Question 49 Chapter 5 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 49 Chapter 5 of +2-A

Question 49 Chapter 5 of +2-A

49. E and F were partners in a firm sharing profits in the ratio of 3 : 1. They
admitted G as a new partner on 1st April, 2019 for 1/3rd share. It was decided that E, F and G will share future profits equally. G brought 50,000 in cash and machinery valued at 70,000 as premium for goodwill.
Pass necessary Journal entries in the books of the firm.

The solution of Question 49 Chapter 5 of +2-A: –

 

Date Particulars
L.F. Debit Credit
  Cash A/c Dr   50,000  
  Machinery A/c Dr   70,000  
  To Premium for Goodwill A/c       1,20,000
  (Being G brought cash Rs 50,000 and Machinery Rs 70,000 for his share of Goodwill)        
  Premium for Goodwill A/c Dr   1,20,000  
  To E’s Capital A/c       1,20,000
  (Being G share of goodwill transferred to E’s Capital Account)        
  F’s Capital A/c Dr   30,000  
  To E’s Capital A/c       30,000
  (Being G share of goodwill transferred to E’s Capital Account)        

 

Old Ratio of E and F = 3 : 1
New Ratio of E, F, and G = 1 : 1 : 1

Sacrificing Share = Old Ratio – New Ratio

E’s Sacrificing Share = 3 1
4 3
  = 9 – 4
12
  = 5 Sacrifice
  12

 

F’s Sacrificing Share = 1 1
4 5
  = 3 – 4
12
  = (-1) Gain
  12

Distribution of G’s share of Goodwill
G’s share of Goodwill = 1,20,000

F gaining the share in the firm’s profit so only E will received the share of goodwill brought by D and he will also receive the share of goodwill from F

Total Firm’s Goodwill = 1,20,000 X 3
1
  = 3,60,000
   

 

F’s Share of Goodwill = Firm’s Goodwill  X Gaining share of F’s
  = 3,60,000 X 1
12
  = 30,000
   

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 49 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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