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12th | Admission of a Partner | Question No.  21 To 25 | Ts Grewal Solution 2022-2023

Question 21:


Give 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

 

Question 22:


B and C are in partnership sharing profits and losses as 3 : 1. They admit D into the firm, D pays premium of    ` 15,000 for 1/3rd share of the profits. As between themselves, B and C agree to share future profits and losses equally. Draft Journal entries showing appropriations of the premium money.

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

Cash A/c

Dr.

 

15,000

 

 

To Premium for Goodwill A/c

 

 

 

15,000

 

(D brought his share of goodwill in cash)

 

 

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

15,000

 

 

To B’s Capital A/c

 

 

 

15,000

 

(Premium for goodwill transferred to B’s Capital)

 

 

 

 

 

 

 

 

 

 

C’s Capital A/c

Dr.

 

3,750

 

 

To B’s Capital A/c

 

 

 

3,750

 

(Goodwill charged from C’s Capital Account due
to his gain in profit sharing)

 

 

 

 

 

 

 

 

 


WN1

Calculation of Sacrificing Ratio:

Let combined share of all partners after D’s admission be = 1

Combined share of B and C after C’s admission be = 1

=1-1/3

=2/3

 

B and C each share of profit after D’s admission will be

=2/3×1/2

=2/6

=1/3 each

 

Sacrificing Ratio =Old ratio- new ratio

 

A’s

=3/4-1/3

 

=5/12 (Sacrifice)

B’s

=1/4-1/3

 

=-1/12(gain)

WN2

C is gaining in new the firm. Hence, C’s gain in goodwill will be debited to his capital and given to B (sacrificing partner).

Goodwill of the firm= premium of Goodwill brought by D × reciprocal of D’s share

=15,000×3/1=45,000

C’s share of gain in goodwill= goodwill of the firm × C’s share of gain

=45,000×1/12=3,750

 

Question 23:


Geeta and Sunita are partners in a firm sharing profits in the ratio of 3 : 2. They admit Anita as a new partner. The new profit-sharing ratio between Geeta, Sunita and Anita will be 5 : 3 : 2. Anita brought in  `25,000 for his share of premium for goodwill. Pass necessary Journal entries for the treatment of goodwill.

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

Cash A/c

Dr.

 

25,000

 

 

To Premium for Goodwill A/c

 

 

 

25,000

 

(Anita brought his share of goodwill in cash)

 

 

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

25,000

 

 

To Geeta’s Capital A/c

 

 

 

12,500

 

To Sunita’s Capital A/c

 

 

 

12,500

 

(Ania’s share of Goodwill distributed in Geeta and Sunita in their sacrificing Ratio)

 

 

 

 

 

 

 

 

 


Working Notes:

WN1

Calculating of Sacrificing Ratio

Sacrificing Ratio =Old ratio- new ratio

 

Geeta’s

=3/5-5/10

 

 

 

=1/10

 

 

Sunita’s

=2/5-3/10

 

 

 

=1/10

 

 

Geeta

 

Sunita

Sacri ficing Ratio =

1/10

:

1/10

 

1

 

1

WN2  

Distribution of Geeta’s share of Goodwill-

Geeta and Sunita each will get =25,000×1/2=12,500

 

Question 24:


A and B are in partnership sharing profits and losses in the ratio of 5 : 3. C is admitted as a partner who pays    ` 40,000 as capital and the necessary amount of goodwill which is valued at ` 60,000 for the firm. His share of profits will be 1/5th which he takes 1/10th from A and 1/10th from B.
Pass Journal entries and also calculate future profit-sharing ratio of the partners.

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

Cash A/c

Dr.

 

52,000

 

 

To C’s Capital A/c

 

 

 

40,000

 

To Premium for Goodwill A/c

 

 

 

12,000

 

(C brought Capital and his share of goodwill in cash)

 

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

12,000

 

 

To A’s Capital A/c

 

 

 

6,000

 

To B’s Capital A/c

 

 

 

6,000

 

(C’s share of Goodwill distributed in A and B)

 

 

 

 

 

 

 

 

 


Working Notes-

WN1

 

A

 

B

Sacrificing Ratio =

1/10

:

1/10

 

1

 

1

WN2

Calculation of new profit sharing Ratio

 

A

B

OLD RATION

5  :

3

New ratio= old ratio – sacrificing ratio

 

 

A’s

=5/8-1/10

 

 

 

=21/40

 

 

B’s

=3/8-1/10

 

 

 

=11/40

 

 

X

 

Y

 

Z

New profit sharing ratio =

21/40

:

11/40

:

1/5  

=

21/40

:

11/40

:

8/40         

WN3

Distribution of C’s share of Goodwill (in Sacrificing Ratio)

A and B each will get =12,000×1/2=6,000

 

Question 25:


Adil and Bhavya are partners sharing profits and losses in the ratio of 7 : 5. They admit Cris, their Manager, into partnership who is to get 1/6th share in the business. Cris brings in    ` 10,000 for his capital and    ` 3,600 for the 1/6th share of goodwill which he acquires 1/24th from Adil and 1/8th from Bhavya. Profits for the first year of the new partnership was    ` 24,000. Pass necessary Journal entries for Cris's admission and apportion the profit between the partners.

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

Cash A/c

Dr.

 

13,600

 

 

To Cris’s Capital A/c

 

 

 

10,000

 

To Premium for Goodwill A/c

 

 

 

3,600

 

(Cris brought capital and his share of goodwill)

 

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

3,600

 

 

To Adil’s Capital A/c

 

 

 

900

 

To Bhavya’s Capital A/c

 

 

 

2,700

 

(Cris’s share of goodwill transferred to Adil and Bhavya in their

sacrificing ratio i.e. 3:1)

 

 

 

 

 

 

 

 

 

 

Profit and Loss Appropriation A/c

Dr.

 

24,000

 

 

To Adil’s Capital A/c

 

 

 

13,000

 

To Bhavya’s Capital A/c

 

 

 

7,000

 

To Cris’s Capital A/c

 

 

 

4,000

 

(Profit after Cris’s admission distributed)

 

 

 

 

 

 

 

 

 

 


Working Note:

WN1

 

Adil

 

Bhavya

Sacrificing Ratio =

1/24

:

1/8

 

1

:

3

WN2

Distribution of Cris’s share of Goodwill (in sacrificing ratio)

Adil will get =3,600×1/4=900

Bhavya will get =3,600×3/4=2,700

WN3

Calculation of New Profit Sharing Ratio

New ratio= old ratio – Sacrificing Ratio

 

Adil’s

=7/12-1/24

 

 

 

=13/24

 

 

Bhavya’s

=5/12-1/8

 

 

 

=7/24

 

 

Adil

 

Bhavya

 

Cris

New profit sharing ratio=

13/24

:

7/24

:

1/6

=

13/24

:

7/24

:

4/24

=

13

:

7

:

4

WN4

Distribution of Profit earned after Cris’s admission (in new ratio)

Adil will get =24,000×13/24=13,000

Bhavya will get =24,000×7/24=7,000

Cris will get =24,000×4/24=4,000

 

Ts Grewal Solution 2022-2023

Click below for more Questions

Class 12 / Volume – I

Chapter 1 – Admission of a Partner

 

Question No. 1 To 5
Question No. 5 To 10
Question No. 11 To 15
Question No. 16 To 20
Question No. 21 To 25
Question No. 26 To 30
Question No. 31 To 35
Question No. 36 To 40
Question No. 41 To 45
Question No. 46 To 50
Question No. 51 To 55

Question No. 56 To 60

Question No. 61 To 65
Question No. 66 To 70
Question No. 71 To 75

Question No. 76 To 80
Question No. 81 To 83
Question No. 84 To 86

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12th TS Grewal’s Accountancy Solutions

Ts Grewal Solution 2022-2023

Ts Grewal Solution 2021-2022

Ts Grewal Solution 2020-2021