Question 16:
A,
B, C and
D are in partnership sharing profits and losses in the ratio of 36 : 24 : 20 : 20 respectively. E
joins the partnership for 20% share and A, B, C and D in
future would share profits among themselves as 3/10 :
4/10 : 2/10 : 1/10. Calculate new profitsharing ratio after E's
admission.
Answer:

A 

B 

C 

D 
OLD RATIO = 
36 
: 
24 
: 
20 
: 
20 
E is admitted for 20/100 share
Let combined share of profit of all partners after E’s admission = 1
Combined share of A, B, C and D
after E’s admission = 1 − E’s Share
=120/100
=80/100
New Ratio = Combined of A, B, C and D Agreed Share of A, B, C and D
A’s 
=80/100×3/10 





=24/100 




B’s 
=80/100×4/10 





=32/100 




C’s 
=80/100×2/10 





=16/100 




D’s 
=80/100×1/10 





=8/100 





A 

B 

C 

D 

E 

New profit sharing ratio = 
24/100 
: 
32/100 
: 
16/100 
: 
8/100 
: 
20/100 

= 
6 
: 
8 
: 
4 
: 
2 
: 
5 

Question 17:
Amit and Vidya
are partners sharing profits in the ratio of 3 : 2.
They admit Chintan into partnership who acquires 1/5th of his
share from Amit
and 4/25th share from Vidya. Calculate New
Profitsharing Ratio and Sacrificing Ratio.
Answer:
Calculation of New Profit Sharing Ratio
Amit: Vidya=3:2 (Old Ratio)
Chintan acquires 1/5th of his share from Amit And,
Remaining 4/5th
(1−1/5) of his share from Vidya.
If 4/5th share of Chintan
=4/25
Chintan 's share=4/25×54=5/25
Amit 's sacrifice=1/5×1/5=1/25
Vidya 's sacrifice=4/25
Amit 's new share=3/5−1/25=1/5−1/25=14/25
Vidya 's new share=2/5−4/25=10−4/25=6/25
Chintan 's new share=1/5×5/5=5/25
Amit: Vidya:R=14:6:5
Sacrificing Ratio=1:4
Question 18:
Gold and Silver are
partners sharing profits and losses in the ratio of 2 :
5. They admit Copper on the condition that he will bring ` 14,000 as his share of goodwill to be distributed between
Gold and Silver. Copper's share in the future
profits or losses will be 1/4th. What will be the new profitsharing ratio and
what amount of goodwill brought in by Copper will be received by Gold and Silver?
Answer;

A 
B 
OLD RATION 
2 : 
5 
C is admitted for 1/4share
Let the combined share of A, B and C be = 1
Combined share of A and B after C’s admission = 1 − C’s share
=11/4
=3/4
New Ratio = Old Ratio  Combined share of A and B
A’s 
=2/7×3/4 

=6/28 
B’s 
=5/7×3/4 

=15/28 
New profit sharing ratio=
A 

B 

C 
6/28 
: 
15/28 
: 
1/4 
6/28 
: 
15/28 
: 
7/28 
6 
: 
15 
: 
7 
Distribution of C’s share of Goodwill OR A and B will be covered
C’s share of Goodwill = ` 14,000
A will get =14,000×2/7=4,000
B will get =14,000×5/7=10,000
Question 19: Vimal and Nirmal are partners in
a firm sharing profits and losses in the ratio of 3: 2. A new partner Kailash is admitted. Vimal gives
1/5th of his share and Nirmal gives 2/5th of his
share in favour of Kailash.
For the purpose of Kailash's admission, goodwill of
the firm is valued at 75,000 and Kailash brings his
share of goodwill in cash which is retained in the business. Journalise the above transactions.
Answer:
Old Ratio of Vimal and Nirmal is 3:2
Share of Profits Kailash will get from Vimal 1/5th of his share 3/5
= 3/5×1/5=3/25
Share of Profits Kailash will get from Nirmal 2/5th of his share 2/5
= 2/5×2/5=4/25
Remaining of –
Vimal = 3/5  3/25 = 12/25
Nirmal= 2/5  4/25 = 6/25
Share of Kailash= 3/25 + 4/25=3+4/25=7/25
New Profit sharing
ratio of Vimal, Nirmal and Kailash= 12/25 : 6/25 : 7/25
Kailash brings his share of goodwill in cash =75,000 × 7/25 = 21,000
Vimal and Nirmal will
be compensated in sacrificing =3:4
Vimal =21,000×3/7=9,000
Nirmal =21,000×4/7=12,000
Journal Entry for Goodwill:

Bank A/c To Premium for Goodwill A/c (Being Goodwill
brought in Cash) 
Dr. Dr. 
21,000 21,000 
21,000 21,000 
Premium for
Goodwill A/c To Vimal’s
Capital A/c To Nirmal
Capital A/c (Being partners
compensated in sacrificing ratio 3:4) 
Question 20:
Pass Journal entries to record the
following arrangements in the books of the firm:
(a) B and C are partners sharing profits in the ratio of 3 :
2. D is admitted paying a premium (goodwill) of `
2,000 for 1/4th share of the profits, shares shares
of B and C remain as before.
(b) B and C are partners sharing profits in the ratio of 3 : 2. D is admitted paying a premium of `
2,100 for 1/4th share of profits which he acquires 1/6th from B and
1/12th from C.
Answer:
(a)
Journal 

Date 
Particulars 
L.F. 
Debit ` 
Credit ` 








Cash A/c 
Dr. 

2,000 


To Premium for Goodwill A/c 



2,000 

(D brought Premium for Goodwill) 











Premium for Goodwill A/c 
Dr. 

2,000 


To B’s Capital A/c 



1,200 

To C’s Capital A/c 



800 

(Premium for Goodwill distributed between B and C in sacrificing ratio i.e. 3:2) 










Working Note:
Distribution of premium for Goodwill
B will get =2,000×3/5=1,200
A will get =2,000×2/5=800
(b)
Journal 

Date 
Particulars 
L.F. 
Debit ` 
Credit ` 


Cash A/c 
Dr. 

2,100 


To Premium for Goodwill A/c 



2,100 

(D brought his share of goodwill in cash) 











Premium for Goodwill A/c 
Dr. 

2,100 


To B’s Capital A/c 



1,400 

To C’s Capital A/c 



700 

(Premium for Goodwill brought distributed between B and C in sacrificing Ratio i.e. 2:1) 










Working Note:
WN1

B 

C 
Sacrificing ratio = 
1/6 
: 
1/12 

2 
: 
1 
WN2
Distribution of Premium for Goodwill
B will get =21,00×2/3=1.400
C will get =21,00×1/3=700
Ts Grewal Solution 20232024
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Class 12 / Volume – I