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12th | Admission Of A Partner | Question No. 31 To 35 | 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 31:


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 32:


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) Goodwill does not exist in the books

(b) Goodwill does not exist in the books at `10,000.

Answer:


 

(a) Goodwill does not exist in the books

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 does not exist in the books 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 33:


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 :D :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 34:


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

 

Question 35:


Anil and Sunil are partners in a firm with fixed capitals of    ` 3,20,000 and    ` 2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April, 2012. Charu brought    ` 3,20,000 as her share of capital.
Calculate value of goodwill and record necessary Journal entries. (AI 2013 C)

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 2012

April 1

Bank A/c

Dr.

 

3,20,000

 

 

  To Charu’s Capital A/c

 

 

 

3,20,000

 

(Capital brought in by Charu)

 

 

 

 

 

 

 

 

 

 

 

Charu’s Current A/c

Dr.

 

1,00,000

 

 

   To Anil’s Current A/c

 

 

 

50,000

 

   To Sunil’s Current A/c

 

 

 

50,000

 

(Charu’s share of goodwill adjusted through current accounts)

 

 

 

 


Working Notes: Calculation of Hidden Goodwill

Total capital of the firm on the basis od Charu’s capital=3,20,000×4/1=

12,80,000

Less- adjusted cpital of partners + new partner’s capital=

(8,80,000)

 

4,00,000

Charu’s share of goodwill=4,00,000×1/4=1,00,000

 

 

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