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12th | Admission of a Partner | Question No.  31 To 35 | Ts Grewal Solution 2022-2023

Question 31:


and B are partners sharing profits in the ratio of 2 : 1. They admit C for 1/4th share in profits. C brings in ` 30,000 for his capital and `8,000 out of his share of `10,000 for goodwill. Before admission, goodwill appeared in books at ` 18,000. Give Journal entries to give effect to the above arrangement.

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

A’s Capital A/c

Dr.

 

12,000

 

 

B’s Capital A/c

Dr.

 

6,000

 

 

To Goodwill A/c

 

 

18,000

 

(Goodwill written-off)

 

 

 

 

 

 

 

 

 

Cash A/c

Dr.

 

38,000

 

 

To C’s Capital A/c

 

 

30,000

 

To Premium for Goodwill

 

 

8,000

 

(C brought Capital and goodwill)

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

8,000

 

 

C’s Capital A/c

Dr.

 

2,000

 

 

To A’s Capital A/c

 

 

6,667

 

To B’s Capital

 

 

3,333

 

(C’s share of goodwill distributed between
A and B in Sacrificing Ratio)

 

 

 

 

 

 

 

 


Working Notes:

WN1 Writing-off of Goodwill

A’s Capital Account will be debited by =18,000×2/3=12,000

B’s Capital Account will be debited by =18,000×1/3=6,000

 

WN2 Distribution of C’s share of Goodwill

A will get =10,000×2/3=6,667

B will get =10,000×1/3=3.333

 

Question 32:


and B are partners sharing profits and losses in the ratio of 3 : 2. They admit C as partner in the firm for 1/4th share in profits which he takes 1/6th from A and 1/12th from B. C brings in only 60% of his share of firm's goodwill. Goodwill of the firm has been valued at `1,00,000. Pass necessary journal entries to record this arrangement.

Answer:


Journal

Date

Particulars

L.F.

Debit

`

Credit

`

 

 

 

 

 

 

 

Bank A/c

Dr.

 

15,000

 

 

     To Premium for Goodwill A/c

 

 

 

15,000

 

(Goodwill brought in cash)

 

 

 

 

 

 

 

 

 

 

 

 Premium for Goodwill A/c

Dr.  

 

15,000

 

 

     To A’s Capital A/c

 

 

 

10,000

 

     To B’s Capital A/c

 

 

 

5,000

 

(Goodwill distributed between A & B in sacrificing ratio)

 

 

 

 

 

 

 

 

 

 

 

C’s Capital A/c

Dr

 

10,000

 

 

     To A’s Capital A/c

 

 

 

6,667

 

     To B’s Capital A/c

 

 

 

3,333

 

(Goodwill adjusted)

 

 

 

 

 

 

 

 

 

 

Working Notes:

WN1: Calculation of Sacrificing Ratio

A's sacrifice =16×22=212

B's sacrifice =112

 Sacrificing Ratio between A and B = 2:1

WN2: Calculation of share in goodwill of new partner

C's share in goodwill=1,00,000×14= 
 ` 25,000

Goodwill brought in cash    ` 15,000(25,000×60%)

Remaining goodwill of    ` 10,000 will be adjusted through C's Capital A/c

 

Question 33:


On the admission of Rao, goodwill of Murty and Shah is valued at    ` 30,000. Rao is to get 1/4th share of profits. Previously Murty and Shah shared profits in the ratio of 3 : 2. Rao is unable to bring amount of goodwill. Give Journal entries in the books of Murty and Shah when:
(a) there is no Goodwill Account and
(b) Goodwill appears in the books at 
`10,000.

Answer:


 

(a) Where there is no Goodwill Account

Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

Rao’s Capital A/c

Dr.

 

7,500

 

 

To Murty’s Capital A/c

 

 

4,500

 

To Shah’s Capital A/c

 

 

3,000

 

(Rao’s share of goodwill charged
from his capital account and distributed between
Murty and Shah in sacrificing ratio i.ech 3:2)

 

 

 

 

 

 

 

 

(b) Goodwill appears at    ` 10,000

Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

Murty’s Capital A/c

Dr.

 

6,000

 

 

Shah’s Capital A/c

Dr.

 

4,000

 

 

To Goodwill A/c

 

 

10,000

 

(Goodwill written-off at the time of Rao’s
admission in old ratio)

 

 

 

 

 

 

 

 

 

Rao’s Capital A/c

Dr.

 

7,500

 

 

To Murty’s Capital A/c

 

 

4,500

 

To Shah’s Capital A/c

 

 

3,000

 

(Rao’s share of goodwill charged from his
Capital Account and distributed between
Murty and Shah in sacrificing ratio i.ech 3:2)

 

 

 

 

 

 

 

 

 

Working Notes;

WN1: Calculation of Rao’s share of Goodwill

Rao’s share of goodwill=30,000×1/4=7,500

 

WN2: Adjustment of Rao’s share of Goodwill

Murty will get =7,500×3/5=4,500

Shah will get =7,500×2/5=3,000

 

Question 34:


A, B and C are in partnership sharing profits and losses in the ratio of 5 : 4 : 1 respectively. Two new partners D and E are admitted. The profits are now to be shared in the ratio of 3 : 4 : 2 : 2 : 1 respectively. D is to pay    ` 90,000 for his share of Goodwill but E has insufficient cash to pay for Goodwill. Both the new partners introduced    ` 1,20,000 each as their capital. You are required to pass necessary Journal entries.

Answer:


Journal

Date

Particulars

L.F.

Debit

`

Credit

`

 

 

 

 

 

 

 

Bank A/c

Dr

 

3,30,000

 

 

   To D’s Capital A/c

 

 

 

1,20,000

 

   To E’s Capital A/c

 

 

 

1,20,000

 

   To Premium for Goodwill A/c

 

 

 

90,000

 

(Capital and Goodwill brought in cash)

 

 

 

 

 

 

 

 

 

 

 

C’s Capital A/c

Dr.

 

36,000

 

 

E’s Capital A/c

Dr.

 

45,000

 

 

Premium for Goodwill A/c

Dr.

 

90,000

 

 

     To A’s Capital A/c

 

 

 

1,35,000

 

     To B’s Capital A/c

 

 

 

36,000

 

(Goodwill adjusted)

 

 

 

 

 

 

 

 

 

 

Working Notes:

WN1: Calculation of Sacrificing Ratio

A :B :C=5:4:1 (Old Ratio)

A :B :C 😀 :E=3:4:2:2:1 (New Ratio)

Sacrificing (or Gaining) Ratio = Old Ratio - New share 

=510−312=30−1560=1560 (Share of sacrifice)

B's share =4/10−4/12=24−20/60=4/60 (Share of sacrifice)

C's share =1/10−2/12=6−10/60=−4/60 (Share of gain)

WN2: Adjustment of Goodwill
D's share in goodwill for 2/12th share=90,000

Total goodwill of the firm = 90,000×12/2=   ` 5,40,000

E's share in goodwill = 5,40,000×1/12=   ` 45,000

C's share in goodwill = 5,40,000×4/60=   ` 36,000

 

Question 35:


A and B are partners in a firm with capital of    ` 60,000 and    ` 1,20,000 respectively. They decide to admit C into the partnership for 1/4th share in the future profits. C is to bring in a sum of    ` 70,000 as his capital. Calculate amount of goodwill.

Answer:


Actual Capital of the firm after admission of C = A’s Capital + B’s Capital + C’s Capital

= 60,000 + 1, 20,000 + 70,000 =    ` 2, 50,000

Capitalised value of the firm on the basis C’s share= 70,000×4/1=2,80,000

Goodwill= Capitalised value of the firm – actual capital of the firm

=2,80,000-2,50,000

=30,000

 

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

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