Question 5 Chapter 4 – Unimax Class 12 Part 1 – 2021

Question 5 Chapter 4 - Unimax Class 12 Part 1 - 2021

Question 5 Chapter 4 – Unimax Class 12 Part 1

5. X, Y and Z are partners of firm sharing profits and losses in ratio of 3 : 2 : 1. They decided to share profits equally with effect from 1st April, 2021. For this purpose goodwill of the firm has been valuled at Rs. 240000. Calculate the amount of gain or sacrifice of each partner and pass journal entry for treatment of goodwill.
(a) When Goodwill is adjusted through Partner’s Capital Accounts.
(b) When Goodwill Accounts is raised and written off.

The solution of Question 5 Chapter 4 – Unimax Class 12 Part 1:

Old Share New Share Difference
X           3/6 1/3 3/6_1/3=1/6 (Sacrifice)
Y           2/6 1/3 2/6_1/3=0 (No Change)
Z           1/6 1/3 1/6_1/3=[1/6] (Gain)

Gaining Partner Z will pay to the sacrificing partner X, the share of goodwill i.e. Rs. 240000 x 1/6 = Rs. 40000
Journal entry :
Z’s Capital A/c Dr. = Rs. 40000
To X’s Capital A/c = Rs. 40000

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)

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)

Check out T.S. Grewal +2 Book 2020@ Official Website of Sultan Chand Publication

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