12th | Admission of a partner  | Question No. 36 To 40 | Ts Grewal Solution 2024-2025

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, 2024. Charu brought    ` 3,20,000 as her share of capital.
Calculate value of goodwill and record necessary Journal entries. (AI 2013 C)

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

 

 

Date	Particulars		Dr. (`)	Cr. (`)
(i)	Bank A/c	Dr.	90,000
	To Nisha's Capital A/c			90, 000
	(Being Nisha brought for her capital)
(ii)	Nisha's Current A/c		22, S00
	To Vanshika's Capital A/c			11,250
	To Shikha's Capital A/c			11,250
	(Being premium shared)

 

Working Notes:

1. Valued capital of firm as per Nisha’s Capital = 90,000×4/1=3,60,000

2. Actual Capital of all partner including Nisha =1,00,000 + 80,000+90,000=2,70,000

3. Goodwill of the Firm (Hidden)= 3,60,000-2,70,000=90,000

Nisha's Share in Goodwill×1/4 =22.500

Goodwill ` 22,500 will be shared by Vanshika and Shikha in sacrificing ratio 1:1

Vanshika =22,500×1/2=11,250

Shikha =22,500×1/2=11,250

 

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.

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

 

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. 

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

Revaluation of Assets and reassessment of Liabilities

Arun and Vijay are partners in a firm sharing profit & loss in the ratio of 3: 2.

BALANCE SHEET (Extract)
Liabilities	`	Assets	`
		Machinery	2,00,000

If the value of machinery in the Balance Sheet is excess by 33 1/3, find the value of machinery to be shown in the New Balance Sheet.

Answer:

 

If the value of machinery in the Balance Sheet is excess by 33 1/3

Then the book value is 100+33 1/3= 133 1/3

Excess Value of Machinery is 2,00,000×33 1/3 ÷ 133 1/3

 

Or

 

= 2,00,000×100/3 ×3/400 = 50,000

Value of machinery to be shown in the New Balance Sheet = 2,00,000-50,000= 1,50,000