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12th | Admission Of A Partner | Question No. 36 To 40 | 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 36:


Bhuwan and Shivam were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were    ` 50,000 and    ` 75,000 respectively. They admitted Atul on 1st April, 2023 as a new partner for 1/4th share in future profits. Atul brought    ` 75,000 as his capital. Calculate the value of goodwill of the firm and record necessary Journal entries for the above transactions on Atul's admission.

Answer:


The journal entries are as follows:
 

Journal

Date

Particulars

L.F.

Debit

`

Credit

`

 2023

 

 

 

 

 

April 1

Bank/Cash A/c

Dr.

 

75,000

 

 

  To Atul’s Capital A/c

 

 

 

75,000

 

(for capital brought on Atul’s admission)

 

 

 

 

 

 

 

 

 

 

April 1

Atul’s Capital A/c

Dr.

 

25,000

 

 

  To Bhuwan’s Capital A/c

 

 

 

15,000

 

  To Shivam’s Capital A/c

 

 

 

10,000

 

(for goodwill distributed in sacrificing ratio of 3:2)

 

 

 

 

 

 

 

 


Here, Atul is entered into partnership for 1/4th share in future profits. He contributes  
 ` 75,000 towards his share of capital.

Taking Atul’s capital as the base, we can calculate the firm’s capital as
Firm's Capital = New Partner's Capital × Reciprocal of his share
i. each = 75,000 × 4 = `3,00,000
However, the total capital as at that date is    `  2,00,000 (i.e. 50,000 + 75,000 + 75,000)
So, the difference of 1,00,000 is hidden goodwill.
Atul’s share in goodwill = 1/4th of 1,00,000 =    ` 25,000

Note: In this case, as no information is provided for the share sacrificed by the old partners, so it is assumed that the old partners are sacrificing in their old profit share.

 

Question 37:


X and Y are partners with capitals of    ` 50,000 each. They admit Z as a partner for 1/4th share in the profits of the firm. Z brings in    ` 80,000 as his share of capital. The Profit and Loss Account showed a credit balance of    ` 40,000 as on date of admission of Z.
Give necessary journal entries to record the goodwill.

Answer:


Total Capital of the firm after Z’s admission = X’s Capital + Y’s Capital + undistributed Profit +

Z’s Capital

= 50,000 + 50,000 + 40,000 + 80,000

=    ` 2,20,000

Capitalised value of the firm on the basis Z’s share= 80,000×4/1=3,20,000

Goodwill= Capitalised value of the firm – T  otal captial after z’s admission

=3,20,000-2,20,000=1,00,000

 

Question 38:


Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th share in the profits of the firm. Ajay brings    ` 5,00,000 as his share of capital. The value of the total assets of the firm was    ` 15,00,000 and outside liabilities were valued at    ` 5,00,000 on that date. Give necessary Journal entry to record goodwill at the time of Ajay's admission. Also show your workings. 

Answer:


Journal

 

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

Ajay’s Capital A/c

Dr.

 

2,00,000

 

 

To Asin’s Capital A/c

 

 

 

1,00,000

 

To Shreya’s Capital A/c

 

 

 

1,00,000

 

(Ajay’s share of goodwill distributed among
the old partners in their sacrificing ratio 1:1.)

 

 

 

 

 

 

 

 

 

 


Working Notes:

Calculation of Goodwill brought in by Ajay

 

Value of firm’s goodwill

= Capitalised value of the firm – Net worth

Capitalised value of the firm

= Share of Ajay's capital × Reciprocal of Ajay's share

= 5,00,000 ×5/1=   ` 25,00,000

Net worth of the new firm 

= Total assets-Outside liabilities + Ajay's capital

= 15,00,000 - 5,00,000 + 5,00,000=    ` 15,00,000

Value of firm's goodwill 

= Capitalised value of firm - Net worth of the new firm

=25,00,000 - 15,00,000 

   ` 10,00,000

Ajay's share of goodwill 

 

= 10,00,000 × 1/5

=   ` 2,00,000


Raising and Writing off Goodwill

 

Question 39: Ankit and Bobby are partners sharing profits in the ratio of 2:1 with capital of ` 7,50,000 and ` 5,00,000  They agree to admit Kartik into partnership who brings ` 2,50,000 as capital and ` 60,000 for 1/4th of goodwill. Goodwill already appears in the books at 45,000.


Pass the necessary Journal entries by raising and writing off goodwill. Also prepare Partners’ Capital Accounts.

 

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

Ankit's Capital A/c

Dr.

 

30,000

 

 

Bobby's Capital A/c

 Dr.

 

15,000

 

 

To  Goodwill A/c

 

 

 

45,000

 

(Being Goodwill written off)

 

 

 

 

 

 

 

 

 

 

 

Bank A/c

Dr.

 

3,10,000

 

 

To Kartik's Capital Ac

 

 

 

3,10,000

 

(Being Capital and Premium for Goodwill brought.)

 

 

 

 

 

 

 

 

 

 

Goodwill A/c

Dr.

 

2,40,000

 

 

To Ankit's Capital A/c

 

 

 

1,60,000

 

To Bobby's Capital A/c

(Being Goodwill Raised)

 

 

80,000

 

 

 

 

 

 

Ankit's Capital A/c

Dr.

 

1,20,000

 

 

Bobby's Capital A/c

 Dr.

 

60,000

 

 

Kartik's Capital A/c

Dr.

 

60,000

 

 

 To Goodwill A/c

 

 

 

2,40,000

 

(Being Goodwill written off)

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Capital account

Particulars

Ankit

Bobby

Kartik

Particulars

Ankit

Bobby

Kartik

To Goodwill A/c

30,000

15,000

-

By Balance b/d

7,50,000

5,00,000

-

To Goodwill A/c

1,20,000

60,000

60,000

By Bank A/c

-

-

3,10,000

 

 

 

 

 

 

 

 

To Balance c/d

7,60,000

5,05,000

2,50,000

By Goodwill A/c

1,60,000

80,000

-

 

 

 

 

 

 

 

 

 

9,10,000

5,80,000

3,10,000

 

9,10,000

5,80,000

3,10,000

 

 

 

 

 

 

 

 

 

 

Working Notes:

New Profit-sharing Ratio-2:1:1

Remaining share after Kartik is 1-1/4=3/4

Share of Ankit and Bobby is reaming share

Ankit = 3/4×2/3=6/12

Bobby = 3/4×1/3=3/12

 

Ankit

:

Bobby

:

Kartik

6/12

:

3/12

:

1/4

6/12

:

3/12

:

3/12

2/4

:

1/4

:

1/4

 

 

 

Question 40:


X and Y are equal partners in a firm. They admit Z into partnership and the new profit-sharing ratio between X, Y and Z is 4: 3:2. On Z's admission, goodwill of the firm is valued at 36,000. Z is unable to bring his share of goodwill premium in cash.

Pass necessary Journal entries for treatment of goodwill on Z's admission by raising and writing off goodwill. 18000; Y's Capital A/c by 18000.

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

Goodwill A/c

Dr.

 

36,000

 

 

To X's Capital A/c

 

 

 

18,000

 

To Y's Capital A/c

(Being Goodwill Raised)

 

 

18,000

 

 

 

 

 

 

X's Capital A/c

Dr.

 

16,000

 

 

Y's Capital A/c

 Dr.

 

12,000

 

 

Z's Capital A/c

Dr.

 

8,000

 

 

 To Goodwill A/c

 

 

 

36,000

 

(Being Goodwill written off)

 

 

 

 

 

 

 

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