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12th | Admission Of A Partner | Question No. 21 To 25 | Ts Grewal Solution 2023-2024

Double Entry Book Keeping Ts Grewal Vol. 1 2019 Solutions for Class 12 Commerce ACCOUNTANCY Chapter 5 - Admission Of A Partner

Question 21:


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 22:


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 23:


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 24:


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    ` 1,00,000 for his capital and    ` 36,000 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    ` 2,40,000. 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.

 

1,36,000

 

 

To Cris’s Capital A/c

 

 

 

1,00,000

 

To Premium for Goodwill A/c

 

 

 

36,000

 

(Cris brought capital and his share of goodwill)

 

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

36,000

 

 

To Adil’s Capital A/c

 

 

 

9,000

 

To Bhavya’s Capital A/c

 

 

 

27,000

 

(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.

 

2,40,000

 

 

To Adil’s Capital A/c

 

 

 

1,30,000

 

To Bhavya’s Capital A/c

 

 

 

70,000

 

To Cris’s Capital A/c

 

 

 

40,000

 

(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 =2,40,000×13/24=1,30,000

Bhavya will get =2,40,000×7/24=70,000

Cris will get =2,40,000×4/24=40,000

 

Question 25:


A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit C into partnership for 1/5th share. C brings    ` 30,000 as capital and ` 10,000 as goodwill. At the time of admission of C, goodwill appeared in the Balance Sheet of A and B at ` 3,000. New profit-sharing ratio of the partners will be 5 : 3 : 2. Pass necessary Journal entries.

Answer:


Journal Entries

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

A’s Capital A/c

Dr.

 

1,800

 

 

B’s Capital A/c

Dr.

 

1,200

 

 

To Goodwill A/c

 

 

 

3,000

 

(Goodwill written-off)

 

 

 

 

 

 

 

 

 

 

 

Cash A/c

Dr.

 

40,000

 

 

To C’s Capital A/c

Dr.

 

 

30,000

 

To Premium for Goodwill A/c

 

 

 

10,000

 

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

 

 

 

 

 

 

 

 

 

 

Premium for Goodwill

Dr.

 

10,000

 

 

To A’s Capital A/c

 

 

 

5,000

 

To B’s Capital A/c

 

 

 

5,000

 

(Premium for Goodwill distributed)

 

 

 

 

 

 

 

 

 

 



 

A

B

C

OLD RATION

3  :

2  :

1

NEW RATIO

5  : 

3  :

2 

 

Sacrificing Ratio = Old Ratio − New Ratio

 

A’s

=3/5-5/10

 

 

 

=1/10

 

 

B’s

=2/5-3/10

 

 

 

=1/10

 

 

X

 

Y

Sacrificing Ratio =

1/10      

:

1/10      

=

1    

:

1

Distribution of Premium for Goodwill C’s share of Goodwill)

A and B each will get =10,000×1/2=5,000

Goodwill written-off

A’s capital will be debited =3,000×3/5=1,800

B’s capital will be credited =3,000×2/5=1,200

 

 

Ts Grewal Solution 2023-2024

Click below for more Questions

Class 12 / Volume – I

Chapter 4 – Admission Of A Parnter

 

Question No. 1 To 5
Question No. 6 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