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12th | Retirement Of A Partner | Question No. 21 To 25 | Ts Grewal Solution 2023-2024

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;   ` 80,000 and  ` 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

Click below for more Questions

Class 12 / Volume – I

Chapter 5 – Retirement of a Partner

 

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
Question No. 36 To 40
Question No. 41 To 45
Question No. 46 To 50
Question No. 51 To 55

Question No. 56 To 60