Question 21
A, B and C were partners in a firm sharing
profits in the ratio of 6 : 5 : 4. Their capitals were
A − ` 1,00,000; B − ` 80,000 and C − ` 60,000 respectively. On 1st April, 2009, A retired
from the firm and the new profit sharing ratio between B and C
was decided as 1 : 4. On A's retirement, the
goodwill of the firm was valued at ` 1,80,000. Showing your calculations clearly, pass the
necessary Journal entry for the treatment of goodwill on A's
retirement.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (`) |
Credit (`) |
|
|
|
C’s
Capital A/c |
Dr. |
|
96,000 |
|
|
|
To A’s Capital A/c |
|
|
|
72,000 |
|
|
To B’s Capital A/c |
|
|
|
24,000 |
|
|
(Being Adjustment of A’s and B’s share of goodwill) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1: Calculation of Gaining Ratio
A :B :C=6:5:4(Old ratio)
B :C=1:4 (New ratio)
Gaining Ratio = New Ratio - Old Ratio
B's Gain =1/5−5/15=3−5/15=
−2/15(Sacrifice)
C's Gain =4/5−4/15=1/2−4/15=8/15
WN2: Calculation of Retiring Partner’s Share of Goodwill
A's share of goodwill=1,80,000×6/15=` 72,000
B's share of goodwill=1,80,000×2/15=` 24,000
A's and B's share of goodwill be brought by C only.Therefore, C's Capital A/c will be debited with 72,000+24,000 = ` 96,000
Raising and Writting
off Goodwill
Question 22:
Aman, Bharat and Chetan were partners sharing profits and losses in the ratio of 3:2:1.On Chetan's retirement. Goodwill of the firm is valued at 1,50,000. Pass the necessary Journal entries for adjustment of goodwill on Chetan's retirement when goodwill is raised at its current or full value.
Answer:
|
Date |
Particulars |
|
Dr. (`) |
Cr. (`) |
|
(a) |
Goodwill A/c |
Dr. |
1,50,000 |
|
|
|
To Aman's Capital A/c |
|
|
75,000 |
|
|
To Bharat's
Capital A/c |
|
|
50,000 |
|
|
To Chetan's
Capital A/e |
|
|
25,000 |
|
|
(Being Raised) |
|
|
|
|
(b) |
Aman's Capital A/c |
|
90,000 |
|
|
|
Bharat's Capital Ale |
|
60,000 |
|
|
|
To
Goodwill A/c |
|
|
1,50,000 |
|
|
(Being Written-off) |
|
|
|
Question 23:
Arti, Bharti and Seema were partners sharing profits equally. Bharti retired and goodwill of the firm was valued at 9,00,000. Arti and Seema decided to share future profits in the ratio of 3 : 1. Pass the necessary
Journal entries for adjustment of goodwill, if goodwill is raised at its current value on Bharti's retirement.
Answer:
|
Date |
Particulars |
|
Dr. (`) |
Cr. (`) |
|
(a) |
Goodwill A/c |
Dr. |
9,00,000 |
|
|
|
To Arti's Capital A/c |
|
|
3,00,000 |
|
|
To Bharti's
Capital A/c |
|
|
3,00,000 |
|
|
To Seema's
Capital A/c |
|
|
3,00,000 |
|
|
(Being Raised) |
|
|
|
|
(b) |
Arti's Capital A/c |
|
6,75,000 |
|
|
|
Seema's Capital A/c |
|
2,25,000 |
|
|
|
To
Goodwill A/c |
|
|
9,00,000 |
|
|
(Being Written-off) |
|
|
|
[Hint: Seema has also sacrificed in addition to Bharti (retiring partner). Therefore, Seema has also been
Compensated by Arti.]
Question 24:
X Y and Z are partners sharing profits in the ratio of3:2:1. Goodwill is appearing in the books at a value of 60,000. Y retires and at the time of Y's retirement, goodwill is valued at 84,000. X and Z decided to share future profits in the ratio of 2 :1. Pass the necessary Journal entries through Goodwill Account
Answer:
|
Date |
Particulars |
|
Dr. (`) |
Cr. (`) |
|
|
X's Capital A/c |
Dr. |
30,000 |
|
|
|
Y's Capital A/c |
Dr. |
20,000 |
|
|
|
Z's Capital A/c |
Dr. |
10,000 |
|
|
|
To
Goodwill A/c |
|
|
60,000 |
|
|
(Being Written-off) |
|
|
|
|
(a) |
Goodwill A/c |
Dr. |
84,000 |
|
|
|
To X's Capital
A/c |
|
|
42,000 |
|
|
To Y's Capital
A/c |
|
|
28,000 |
|
|
To Z's Capital
A/c |
|
|
14,000 |
|
|
(Being Raised) |
|
|
|
|
(b) |
X's Capital A/c |
Dr. |
56,000 |
|
|
|
Z's Capital A/c |
Dr. |
28,000 |
|
|
|
To
Goodwill A/c |
|
|
84,000 |
|
|
(Being Written-off) |
|
|
|
Question 25:
Raju, Amit and Chander were partners in a firm sharing profits in the ratio of 5 :3 :2. Goodwill appeared in their books at a value of 1,50,000. Amit decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at 6,00,000. New profit-sharing ratio decided between Raju and Chander was 2:3.
Pass the necessary Journal entries for goodwill by raising and writing off goodwill to the extent of retiring partner's share.
Answer:
|
Date |
Particulars |
|
Dr. (`) |
Cr. (`) |
|
|
Raju's Capital A/c |
Dr. |
75,000 |
|
|
|
Amit's Capital A/c |
Dr. |
45,000 |
|
|
|
Chander's Capital A/c |
Dr. |
30,000 |
|
|
|
To
Goodwill A/c |
|
|
1,50,000 |
|
|
(Being Written-off) |
|
|
|
|
(a) |
Goodwill A/c |
Dr. |
1,80,000 |
|
|
|
To Amit's
Capital A/c |
|
|
1,80,000 |
|
|
(Being Raised) |
|
|
|
|
(b) |
Chander's Capital A/c |
Dr. |
2,40,000 |
|
|
|
To
Goodwill A/c |
|
|
1,80,000 |
|
|
To
Raju's Capital A/c |
|
|
60,000 |
|
|
(Being Written-off) |
|
|
|
[Hints- 1. Chander is the only gaining partner, he will compensate not only the retiring partner (Amit) but also the sacrificing partner (Raju).
2. Amit will compensate Raju to the extent of sacrifice made by him, ie., 6,00,000×1/10=60,000.]
Ts Grewal Solution 2023-2024
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Class 12 / Volume – I