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12th | Admission Of A Partner | Question No. 56 To 60 | 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 56: Vimal and Nirmal are partners in a firm sharing profits and losses in the ratio of 5:3. They admit Kailash into the firm on 1st April, 2023, when their Balance Sheet was as follows:


Liabilities

`

Assets

`

Vimal's Capital

32,000

Goodwill

8,000

Nirmal's Capital

34,000

 Machinery

38,000

General Reserve

8,000

Furniture

5,000

Bank Loan

6,000

Debtors

23,000

Creditors

6,000

Stock

7,000

 

 

Cash

5,000

 

 

 

 

 

86,000

 

86,000

Terms of Kailash's admission were as follows:

(i) Kailash will bring ` 30,000 as his share of capital and will be entitled to 1/3rd share in the profits.

(ii) Kailash is not to bring goodwill in cash, Vimal and Nirmal raise the goodwill in the books.

(iii) Goodwill of the firm is valued on the basis of 2 years' purchase of the average profit of the last three years. Average profit of the last three years is ` 6,000.

(iv) Machinery and stock are revalued at ` 45,000 and ` 8,000 respectively.

Prepare a Revaluation Account and Partners' Capital Accounts incorporating the above adjustments.

Answer:


 

 

Revaluation Account

Particulars

`

Particulars

`

Gain

8,000

Machinery

7,000

Vimal’s cap-5,000

 

Stock

1,000

Nirmal’s cap- 3,000

 

 

 

 

8,000

 

8,000


Capital account

Particulars

Vimal

Nirmal

Kailash

Particulars

Vimal

Nirmal

Kailash

To Goodwill A/c

5,000

3,000

-

By Balance b/d

32,000

34,000

-

To Goodwill A/c

5,000

3,000

-

By Cash A/c

-

-

30,000

To Balance c/d

39,500

38,500

30,000

By Goodwill A/c

7,500

4,500

-

 

 

 

 

By Revaluation A/c

5,000

3,000

-

 

 

 

 

By General reserve A/c

5,000

3,000

 

 

49,500

44,500

30,000

 

49,500

44,500

30,000

 

 

 

 

 

 

 

 

 

Working note:

1.      Goodwill valuation

Goodwill = 6,000×2=12,000

 

2.      Goodwill 12,000 raised in 3:2 in sacrificing ratio

Vimal =12,000×3/5=7,500

Nirmal =12,000×2/5=4,500

 

 Goodwill  A/c

Dr.

12,000

 

 To Vimal’s capital A/c

 

 

7,500

 To Nirmal’s capital A/c

 

 

4,500

(Being goodwill raised)

 

 

 

 

Goodwill 12,000 written off in 5:3:4 in sacrificing ratio

Vimal =12,000×5/12=5,000

Nirmal =12,000×3/12=3,000

                  Kailash = 12,000×4/12=4,000

 

Vimal’s capital A/c

Dr.

5,000

 

Nirmal’s capital A/c

Dr.

3,000

 

Kailash’s current A/c

Dr.

4,000

 

 To Goodwill  A/c

 

 

12,000

(Being goodwill written off)

 

 

 

 

1.      Profit of Revaluation shared in old ratio (3:2)

Vimal =8,000×3/5=5,000

Nirmal =8,000×3/5=3,000

 

2.      General reserve shared in old ratio (3:2)

Vimal =8,000×3/5=5,000

Nirmal =8,000×3/5=3,000

 

 

Note: Since, Kailash is not to bring goodwill in cash, will be compensated through Kailash’s current account.

 

 

Question 57:


 X, Y and Z are equal partners with capitals of `15,000; `17,500 and `20,000 respectively. They agree to admit W into equal partnership upon payment in cash `15,000 for 1/4th share of the goodwill and `18,000 as his capital, both sums to remain in the business. The liabilities of the old firm were `30,000 and the assets, apart from cash, consist of Motors `12,000, Furniture `4,000, Stock `26,500 and Debtors `37,800. The Motors and Furniture were revalued at `9,500 and `3,800 respectively.

Pass Journal entries to give effect to the above arrangement and also show Balance Sheet of the new firm.

 

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 

 

 

 

 

 

Cash A/c

Dr.

 

3,3000

 

 

To W’s capital A/c

To Premium for Goodwill A/c

 

 

 

1,8000

1,5000

 

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

 

 

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

1,5000

 

 

To X’s Capital A/c

To Y’s Capital A/c

To Z’s Capital A/c

 

 

 

5000

5000

5000

 

(Being w’s share of Goodwill transferred in their sacrificing Ratio)

 

 

 

Revaluation A/c                                        Dr.

  To Motor A/c

  To Furniture A/c

(Being decrease in value assets transferred to Revaluation A/c)

2700

 

2500

200

X’s Capital A/c                              Dr.

Y’s Capital A/c                              Dr.

Z’s Capital A/c                              Dr.

  To Revaluation A/c         

(Being loss of Revaluation of transferred to old partners capital A/c)

900

900

900

 

 

 

2700

 

 

 

 

 

 

Balance sheet of new firm

Liabilities

   `

Assets

   `

Liabilities

30,000

Cash balance

(2,200+33,000)

35,200

X's Capital

19,100

 

Motor

9,500

Y's Capital

Z’s Capital

21,600

24,100

 

furniture

Stock

3,800

26,500

Z’s Capital

 18,000

 82,800

Debtors

37,800

 

1,12,800

1,12,800

 

 

 

 

 

 

 

Working notes;

 

WN-1

Memorandum balance sheet is prepared to find out Cash balance.

Liabilities

   `

Assets

   `

Liabilities

30,000

Cash balance

(Balancing figure)

2200

X's Capital

15,000

 

Motor

12,000

Y's Capital

Z’s Capital

17,500

20,000

 

52,500

furniture

Stock

4,000

26,500

 

 

 

Debtors

37,800

 

82,500

82,500

 

 

 

 

 

 

WN-2

Old ratio of X:Y:Z=1;1;1

W is admitted for ¼ share

Let total profit =1

Remaining profit after W’s admission= 1-1/4=3/4

X=3/4×1/3=3/12

Y=3/4×1/3=3/12

Z=3/4×1/3=3/12

W=1/4×3/3=3/12

Therefore share of X, Y , Z and W=3:3:3:3=1:1:1:1

Sacrificing ratio= old –new

X=1/3-1/4=1/12

Y=1/3-1/4=1/12

Z=1/3-1/4=1/12

Sacrificing ratio of X, Y , Z = 1:1:1

 

WN-4

 

Particulars

`

Particulars

`

To Motors A/c

To Furniture A/c

2500

200

By Loss

Capital A/c (In old Ratio)

X=2700×1/3=900

Y=2700×1/3=900

Z=2700×1/3=900

 

 

 

2700

 

2700

 

2700

 

WN-5

Partners’ Capital A/c

 

Particulars

X

`

Y

`

Z

`

W

`

Particulars

X

`

Y

`

Z

`

W

`

 

To ravaluation A/c

To balance c/d

900

19,100

900

21,600

900

24,100

-

1,8000

By Balance b/d

By Cash A/c

By Premium A/c

15,000

-

5000

17,500

-

5000

20,000

-

5000

-

18,000

-

 

 

20,000

22,500

25,000

18,000

 

20,000

22,500

25,000

18,000

 

 

Question 58:


Following was the Balance Sheet of A and B who were sharing profits in the ratio of 2 : 1 as at 31st March, 2023:

 

Liabilities

   `

Assets

   `

Capital A/c’s:

 

Building

25,000

A

15,000

 

Plant and Machinery

17,500

B

10,000

25,000

Stock

10,000

Sundry Creditors

 

32,950

Sundry Debtors

4,850

 

 

 

Cash in Hand

600

 

 

 

 

 

 

 

 

 

 

 

 

57,950

 

57,950

 

 

 

 

 


They admit C into partnership on the following terms:
(a) C was to bring  
` 7,500 as his capital and  `3,000 as goodwill for 1/4th share in the firm.
(b) Values of the Stock and Plant and Machinery were to be reduced by 5%.
(c) A Provision for Doubtful Debts was to be created in respect of Sundry Debtor  `375.
(d) Building was to be appreciated by 10%.
Pass necessary Journal entries to give effect to the arrangements. Prepare Profit and Loss Adjustment Account (or Revaluation Account), Partners' Capital Accounts and Balance Sheet of the new firm.

Answer:


Journal

Date

Particulars

L.F.

Debit

`

Credit

`

 

 

 

 

 

 

Profit and Loss Adjustment A/c

Dr.

 

1,750

 

 

To Stock A/c

 

 

500

 

To Plant and Machinery A/c

 

 

875

 

To Reserve for Doubtful Debts A/c

 

 

375

 

(Decrease in stock and Plant and creation of Reserve for Doubtful Debt transferred to Profit and Loss Adjustment Account)

 

 

 

 

 

 

 

 

 

Building A/c

Dr.

 

2,500

 

 

To Profit and Loss Adjustment A/c

 

 

2,500

 

(Increase in value of Building of transferred to Profit and loss Adjustment Accounts)

 

 

 

 

 

 

 

 

 

Profit and Loss Adjustment A/c

 

750

 

 

To A’s Capital A/c

 

 

500

 

To B’s Capital A/c

 

 

250

 

(Profit on revaluation of asset and liabilities
distributed between A and B in their old ratio)

 

 

 

 

 

 

 

 

 

Cash A/c

Dr.

 

10,500

 

 

To C’s Capital A/c

 

 

7,500

 

To Premium for Goodwill A/c

 

 

3,000

 

(C brought capital and share of goodwill)

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

3,000

 

 

To A’s Capital A/c

 

 

2,000

 

To B’s Capital A/c

 

 

1,000

 

(Premium for Goodwill distributed between
A and B in their sacrificing ratio i.e 2:1)

 

 

 

 

 

 

 

 

 

Profit and Loss Adjustment Account

Dr.

 

Cr.

Particulars

`

Particulars

`

Stock

500

 

 

Plant and Machinery

875

Building                             

2,500

Reserve for Doubtful Debts

375

 

 

Profit transferred to

 

 

 

   A Capital

500

 

 

   B Capital

250

 

 

 

2,500

 

2,500

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

A

B

C

Particulars

A

B

C

 

 

 

 

Balance b/d

15,000

10,000

 

 

 

 

 

Cash

 

 

7,500

 

 

 

 

Premium for Goodwill

2,000

1,000

 

Balance c/d        

17,500

11,250

7,500

Profit and Loss Adjustment (Profit)

500

250

 

 

17,500

11,250

7,500

 

17,500

11,250

7,500

 

 

 

 

 

 

 

 

 

Balance Sheet

as on March 31, 2023 after admission of C

Liabilities

`

Assets

`

 

 

 

 

Capital Accounts:                       

 

Building (25,000 + 2,500)

27,500

A

17,500

 

Plant and Machinery (17,500 – 875)

16,625

B

11,250

 

Stock (10,000 – 500)

9,500

C

7,500

36,250

 

Sundry Creditors

32,950

Sundry Debtors

4,850

 

 

 

Less: Provision for D. Debts

375

4,475

 

 

Cash in Hand (600 + 10,500)

11,100

 

69,200

 

69,200

 

 

 

 


Working Notes:

WN1

 

A

B

Sacrificing ratio

2  :

1


WN2
Distribution of Premium for Goodwill (in sacrificing ratio)
A will get =3,000×2/3=2,000

B will get =3,000×1/3=1,000



WN3
Distribution of Profit from Profit and loss Adjustment Account (in old ratio)

A will get =750×2/3=500

B will get =750×1/3=250

 

Question 59:


A and B are carrying on business in partnership and sharing profits and losses in the ratio of 3 : 2. Their Balance Sheet as at 31st March, 2023 stood as:   

 

Liabilities

   `

Assets

   `

Creditors

11,800

Cash

1,500

General Reserve

 

20,000

 

 

A's Capital

51,450

 

Stock

28,000

B's Capital

36,750

88,200

Debtors

19,500

 

 

 

Furniture

2,500

 

 

 

Machinery

48,500

 

 

 

Goodwill

20,000 

 

 

 

 

 

 

 

1,20,000

 

1,20,000

 

 

 

 

 

 

They admit C into partnership on 1st April, 2023 and give him 1/8th share in future profits on the following terms:
(a) Goodwill of the firm be valued at twice the average of the last three years' profits which amounted to 
` 21,000; ` 24,000 and ` 25,560.
(b) C is to bring cash for the amount of his share of goodwill.
(c) C is to bring cash 
`15,000 as his capital.
Pass Journal entries recording these transactions, draw out the Balance Sheet of the new firm and determine new profit-sharing ratio.

 

Answer:


Journal

Date

Particulars

L.F.

Debit

   `

Credit

   `

 (i

 

 

 

A’s Capital A/c

Dr.

 

12,000

 

B’s Capital A/c

Dr.

 

8,000

 

 

 To Goodwill A/c

 

 

 

20,000

 

(Being Goodwill written off)

 

 

 

 

 (ii)

Cash A/c

Dr.

 

20,880

 

 

 To C’s Capital A/c

 

 

 

15,000

 

 To Premium for Goodwill A/c

 

 

 

5,880

 

(Being capital and premium for goodwill received in cash)

 

 

 

(iii)

Premium for Goodwill A/c

Dr.

 

5,880

 

 

 To A’s Capital A/c

 

 

 

3,528

 

 To B’s Capital A/c

 

 

 

2,352

 

(Being premium for goodwill transferred to sacrificing partners)

 

 

 

 

(iv)

General reserves A/c

Dr.

 

20,000

 

 

 To A’s Capital A/c

 

 

 

12,000

 

 To B’s Capital A/c

 

 

 

8,000

 

(Being General reserves transferred to old partners)

 

 

 

 

 

Capital account

Particulars

A

B

C

Particulars

A

B

C

To Goodwill A/c

12,000

8,000

-

By Balance B/d

51450

36750

-

To Balance c/d

54,978

39,102

15,000

By Cash A/c

-

-

15,000

 

 

 

 

By Premium A/c

3,528

2,352

-

 

 

 

 

By Reserve A/c

12,000

8,000

-

 

 

 

 

 

 

 

 

 

66,978

47,102

15,000

 

66,978

47,102

15,000

 

 

 

 

 

 

 

 

 

                  BALANCE SHEET as at 31st March, 2023                 

Liabilities

`

Assets

`

Creditors

11,800

Cash

22,380

 

 

Stock

28,000

Capital A/cs:

 

Debtors   

19,500

A - 54,978

 

Furniture

2,500

B - 39,102

 

Machinery

48,500

    C - 15,000

1,09,080

 

 

 

 

 

 

 

1,20,880

 

1,20,880


Calculation of New Profit Sharing Ratio

 

A

 

B

Old ratio=

3 

:

2 



C is admitted for 1/8 share of profit
Let combined share of all partners after admission of C be = 1
Combined share of A and B after C’s admission = 1 − C’s share
=1-1/8

=7/8

 

New ratio= old ratio × combined share of X and Y

A’s

=3/5×7/8

 

=21/40

B’s

=2/5×7/8

 

=14/40

 

 

X

 

Y

 

Z

New profit sharing ratio=

21/40

:

14/40

:

1/8      

=

21/40

:

14/40

:

5/40     

=

21         

:

14

:

5       



Working Note-

WN1
Calculation of goodwill

Average profit =21,000+25,000+25,560/3=23,520

Goodwill= Average profit × no. of purchases years’

Goodwill=  23,520×2 =47,040

C‘s of goodwill=47,040×1/8 =5,880

WN2
Distribution of premium of goodwill

A will get =5,880×3/5=3528

B will get =5,880×2/5=2352

 

Question 60:


Balance Sheet of J and K who share profits in the ratio of 3 : 2 is as follows:

BALANCE SHEET

as at 31st March, 2023

Liabilities

   `

Assets

   `

Reserve

1,00,000

Cash 

2,00,000

  J's Capital

1,50,000

 

Other Assets

1,50,000

  K's Capital

1,00,000

2,50,000

 

 

 

3,50,000

 

3,50,000

 

 

 

 


M joins the firm from 1st April, 2023 for a half share in the future profits. He is to pay
` 1,00,000 for goodwill and  `3,00,000 for capital. Draft the Journal entries and prepare Balance Sheet in each of the following cases:
(a) If M acquires his share of profit from the firm in the profit-sharing ratios of the partners.
(b) If M acquires his share of profits from the firm in equal proportions from the original partners.
(c) If M acquires his share of profit in the ratio of 3 : 1 from the original partners, ascertain the future profit-sharing ratio of the partners in each case.

Answer:


(a) If M acquires his share of profit from the firm in the original ratios of the partners.
 

Journal

Date
 

Particulars

L.F.

Debit

`

Credit

`

2023

Apr.1


Cash A/c


Dr.

 


4,00,000

 

 

To M’s Capital A/c

 

 

3,00,000

 

To Premium for Goodwill A/c

 

 

1,00,000

 

(M brought capital and his of goodwill in cash)

 

 

 

 

 

 

 

 

Apr.1

Premium for Goodwill A/c

Dr.

 

1,00,000

 

 

To J’s Capital A/c

 

 

60,000

 

To K’s Capital A/c

 

 

40,000

 

(Premium for Goodwill distributed between
J and K in their Sacrificing Ratio)

 

 

 

 

 

 

 

 

Apr.1

Reserve A/c

Dr.

 

1,00,000

 

 

To J’s Capital A/c

 

 

60,000

 

To K’s Capital A/c

 

 

40,000

 

(Reserve distribution between M and J in their old ratio)

 

 

 

 

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

 

 

 

 

 

Cr.

Particulars

J

K

M

Particulars

J

K

M

 

 

 

 

Balance b/d

1,50,000

1,00,000

 

 

 

 

 

Cash

 

 

3,00,000

 

 

 

 

Premium for
Goodwill

60,000

40,000

 

Balance c/d

2,70,000

1,80,000

3,00,000

Reserve

60,000

40,000

 

 

2,70,000

1,80,000

3,00,000

 

2,70,000

1,80,000

3,00,000

 

 

 

 

 

 

 

 

 

Balance Sheet

as on April 01, 2023 after M’s admission

Liabilities

`

Assets

`

 

 

Cash (2,00,000 + 4,00,000)

6,00,000

  J’s Capital

2,70,000

Other Assets

1,50,000

  K’s Capital

1,80,000

 

 

  M’s Capital                     

3,00,000

 

 

 

7,50,000

 

7,50,000

 

 

 

 


Calculation of Future (New) Profit Sharing Ratio

 

M

J

OLD RATION

3  :

2  :


M is admitted for ½    share of profit
Let the combined share of all partners after admission of M be = 1


Combined share of J and K after M’s admission = 1 − M’s share

=1-1/2

=1/2

New ratio= old ratio –Combined share of B and C

J= 3/5×1/2=3/10

k=2/5×1/2=2/10

 

J

 

K

 

M

New profit sharing ratio=

3/10

:

2/10

:

1/2

=

3/10

:

2/10

:

5/10

=

3

:

2

:

5


Working Notes-

WN1
Distribution of Premium for Goodwill (in sacrificing ratio)

J will get =1,00,000×3/5=60,000

K will get =1,00,000×2/5=40,000


WN2
Distribution of General Reserve (in old ratio)
J will get =1,00,000×3/5=60,000

K will get =1,00,000×2/5=40,000

(b) If M acquires his share of profit from the firm in equal proportions from the original partners.
 

Journal

Date
 

Particulars

L.F.

Debit

`

Credit

`

2022

 

 

 

 

April 1

Reserve A/c

Dr.

 

1,00,000

 

 

To J’s Capital A/c

 

 

60,000

 

To K’s Capital A/c

 

 

40,000

 

(Reserve distributed between J and K in old ratio)

 

 

 

 

 

 

 

 

April 1

Cash A/c

Dr.

 

4,00,000

 

 

To M’s Capital A/c

 

 

3,00,000

 

To J’s Premium for Goodwill A/c

 

 

1,00,000

 

(M brought capital and his share of goodwill)

 

 

 

 

 

 

 

 

April 1

Premium for Goodwill A/c

Dr.

 

1,00,000

 

 

To J’s Capital A/c

 

 

50,000

 

To K’s Capital A/c

 

 

50,000

 

(Premium for Goodwill distributed between J and K in sacrificing Raito i.e 1:1)

 

 

 

 

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

J

K

M

Particulars

J

K

M

 

 

 

 

Balance b/d

1,50,000

1,00,000

 

 

 

 

 

Cash

 

 

3,00,000

 

 

 

 

Premium for
Goodwill

50,000

50,000

 

Balance c/d

2,60,000

1,90,000

3,00,000

Reserve

60,000

40,000

 

 

2,60,000

1,90,000

3,00,000

 

2,60,000

1,90,000

3,00,000

 

 

 

 

 

 

 

 

 

Balance Sheet

as on April 01, 2022 after M’s admission

Liabilities

`

Assets

`

   J’s Capital

2,60,000

Cash (2,00,000 + 4,00,000)

6,00,000

   K’s Capital

1,90,000

Others Assets

1,50,000

   M’s Capital                      

3,00,000

 

 

 

7,50,000

 

7,50,000

 

 

 

 


Calculation of future (new) profit sharing ratio

 

J

K

Old ratio

3  :

2 

 


M is admitted for ½    share of profit
J and K each will sacrifice in favour of  M=1/2×1/2=1/4

New ratio= old ratio – Sacrificing Ratio

 

J’s

=3/5-1/4

 

 

 

=7/20

 

 

k’s

=2/5-1/4

 

 

 

=3/20

 

 

J

 

K

 

M

New profit sharing ratio=

7/20

:

3/20

:

1/2

=

7/20

:

3/20

:

10/20

=

7

:

3

:

10

 

 

J

 

K

 

Sacrificing ratio=

1/4

:

1/4

=1:1     





Working Notes:

WN1
Distribution of Premium for Goodwill (in Sacrificing ratio)
J and K each will get =1,00,000×1/2=50,000

WN2
Distribution of General Reserve (in old ratio)
J will get =1,00,000×3/5=60,000
K will get =1,00,000×2/5=40,000

(c) If M acquires his share of profit in the ratio of 3:1 from the original partner

Journal

Date
 

Particulars

L.F.

Debit

`

Credit

`

2022

Apr.1


Reserve A/c


Dr.

 


1,00,000

 

 

To J’s Capital A/c

 

 

60,000

 

(Reserve distributed between J and K at the time of M’s admission)

 

 

 

 

 

 

 

 

April 1

Cash A/c

Dr.

 

4,00,000

 

 

To M’s Capital A/c

 

 

3,00,000

 

To Premium for Goodwill A/c

 

 

1,00,000

 

(M brought Capital his share of Goodwill)

 

 

 

 

 

 

 

 

April 1

Premium for Goodwill A/c

Dr.

 

1,00,000

 

 

To J’s Capital A/c

 

 

75,000

 

To K’s Capital A/c

 

 

25,000

 

(Premium for Goodwill distributed between
J and K in their sacrificing ratio i.e 3:1)

 

 

 

 

 

 

 

 

 

Partners’ Capital Accounts

Dr.

 

Cr.

Particulars

J

K

M

Particulars

J

K

M

 

 

 

 

Balance b/d

1,50,000

1,00,000

 

 

 

 

 

Cash

 

 

3,00,000

 

 

 

 

Premium for
Goodwill

75,000

25,000

 

 

 

 

 

Reserve

60,000

40,000

 

Balance c/d

2,85,000

1,65,000

3,00,000

 

 

 

 

 

2,85,000

1,65,000

3,00,000

 

2,85,000

1,65,000

3,00,000

 

 

 

 

 

 

 

 

 

Balance Sheet

as on April 01, 2022 after M’s admission

Liabilities

`

Assets

`

   J’s Capital

2,85,000

Cash (2,00,000 + 4,00,000)

6,00,000

K’s Capital

1,65,000

Other Assets

1,50,000

   M’s Capital                   

3,00,000

 

 

 

7,50,000

 

7,50,000

 

 

 

 


Calculation of Future (New) Profit Sharing Ratio

 

J

K

Old ratio

3  :

2 

M is admitted for ½ share of profit

J’s sacrificing rato

=1/2×3/4

 

=2/8

K’s sacrificing rato

=1/2×1/4

 

=1/8

New Ratio = Old Ratio − Sacrificing Ratio

J’s

=3/5-3/8

 

 

=9/40

 

K’s

=2/5-1//8

 

 

=11/40

 

 

J

 

K

 

M

New profit sharing ratio=

9/40

:

11/40

:

1/2      

=

9/40

:

11/40

:

20/40     

=

9         

:

11

:

20       

 

Working Notes:
WN1
Distribution of Premium for Goodwill (in sacrificing ratio)
J will get =1,00,000×3/4=75,000

K will get =1,00,000×1/4=25,000


WN2
Distribution of Reserve (in old ratio)
J will get =1,00,000×3/5=60,000

K will get =1,00,000×2/5=40,000

 

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