Question 16: Aman, Bimal and Deepak are
partners sharing profits in the ratio of 2: 3: 5. The goodwill of the firm has
been valued at ₹37,500. Aman retired. Bimal and Deepak decided to share profits equally in
future.
Calculate
gain/sacrifice of Bimal and Deepak on Aman's retirement and also pass necessary Journal entry for
the treatment of goodwill. (CBSE 2019)
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
Bimal’s capital a/c |
Dr. |
7,500 |
|||
|
|
To Amal’s
capital a/c |
7,500 |
|||
|
|
(Being Goodwill
adjusted) |
||||
|
|
|
|
|
|
|
Working notes;
WN1-
Calculation of gaining and sacrificing ratio
|
|
Amal
|
Bimal
|
Deepak
|
Old ratio
|
2 :
|
3
:
|
5
|
New ratio
|
Retires
|
1 :
|
1
|
Bimal = 3/10-1/2=3-5/10= -2/10
Deepak =5/10-1/2=5-5/10= 0/10
Gaining ratio of Sunil and David=13:11
WN2-
Firms goodwill =37,500
Share of retiring partner Amal is 2/10
Share of Amal share =37,500×2/10=7,500
Bimal will compensate 7,500
Question 17:
M, N and O are partners in a
firm sharing profits in the ratio of 3 : 2 : 1.
Goodwill has been valued at ₹ 60,000. On N's retirement,
M and O agree to share profits equally. Pass the necessary
Journal entry for treatment of N's share of goodwill.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
|
|
|
|
|
|
|
O’s
Capital A/c |
Dr. |
|
20,000 |
|
|
|
To N’s Capital A/c |
|
|
|
20,000 |
|
|
(Being Adjustment of N’s share of goodwill) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1:Calculation
of Gaining Ratio
M :N :O=3:2:1(Old ratio)
M :O =1:1(New ratio)
Gaining Ratio = New Ratio - Old Ratio
M's Gain =1/2−3/6=3−3/6=0
O's Gain=1/2−1/6=3−1/6=2/6
WN2: Calculation of Retiring Partner’s Share of Goodwill
N's share of goodwill=60,000×2/6=₹ 20,000
N's share of goodwill will be brought by O only.
Therefore, O's Capital A/c will be debited with ₹ 20,000
Question
18:
A, B, C and D
are partners sharing profits in the ratio of 3:3:2:2 respectively. D retires
and A, B and C decide to share future profits in the ratio of 3:2:1. Goodwill
of the firm is valued at ₹6,00,000. Goodwill
existed in the books at ₹4,50,000. Profits for
the first year after D's retirement was ₹12,00,000.
Give the necessary
Journal entries to record Goodwill
and to distribute the profits. Show your
calculations.
Answer:
|
Date
|
Particulars |
|
L.F. |
(Dr.) ₹ |
(Cr.) ₹ |
|
1. |
A's Capital A/c |
Dr. |
|
1,35,000 |
|
|
|
B's Capital A/c |
Dr. |
|
1,35,000 |
|
|
|
C's Capital A/c |
Dr. |
|
90,000 |
|
|
|
D's Capital A/c |
Dr. |
|
90,000 |
|
|
|
To Goodwill A/c |
|
|
|
4,50,000 |
|
|
(Being old Goodwill written off) |
|
|
|
|
|
2. |
A's Capital A/c |
Dr. |
|
1,20,000 |
|
|
|
B's Capital A/c |
Dr. |
|
20,000 |
|
|
|
To C's Capital A/c |
|
|
|
20,000 |
|
|
To D's Capital A/c |
|
|
|
1,20,000 |
|
|
(Being sacrificing partners
compensated) |
|
|
|
|
|
3. |
Profit and Loss Appropriation A/c |
Dr. |
|
12,00,000 |
|
|
|
To A's Capital A/c |
|
|
|
6,00,000 |
|
|
To B's Capital A/c |
|
|
|
4,00,000 |
|
|
To C's Capital A/c |
|
|
|
2,00,000 |
|
|
(Being profit distributed in 3:2:1) |
|
|
|
|
Working
notes:
WN
1: Calculation Gaining and Sacrificing Ratio
Old Ratio (before retirement):
A
: B : C : D = 3 : 3 : 2 : 2
Total
parts = 3 + 3 + 2 + 2 = 10
A = 3/10
B = 3/10
C = 2/10
D = 2/10
New Ratio (after D retires):
A
: B : C = 3 : 2 : 1
Total
parts = 3 + 2 + 1 = 6
A = 3/6 = 1/2
B = 2/6 = 1/3
C = 1/6
Calculation Gaining/Sacrificing Ratio:
|
A
|
= |
3/10 |
- |
3/6 |
= |
9-15/30 |
= |
-6/30 |
Gain |
|
B
|
= |
3/10 |
- |
2/6 |
= |
9-10/30 |
= |
-1/30 |
Gain |
|
C
|
= |
2/10 |
- |
1/6 |
= |
6-5/30 |
= |
1/30 |
Sacrifice |
|
D
|
= |
2/10 |
- |
0/6 |
= |
6-0/30 |
= |
6/30 |
Sacrifice |
WN
2: Calculation
share of Goodwill of Each partner
|
A
|
= |
6,00,000 |
× |
-6/30 |
= |
1,20,000 |
Debit |
|
B
|
= |
6,00,000 |
× |
-1/30 |
= |
20,000 |
Debit
|
|
C
|
= |
6,00,000 |
× |
1/30 |
= |
20,000 |
Credit |
|
D
|
= |
6,00,000 |
× |
6/30 |
= |
1,20,000 |
Credit |
WN
3: Calculation
share of old Goodwill to be written off
|
A
|
= |
4,50,000 |
× |
3/10 |
= |
1,35,000 |
|
B
|
= |
4,50,000 |
× |
3/10 |
= |
1,35,000 |
|
C
|
= |
4,50,000 |
× |
2/10 |
= |
90,000 |
|
D
|
= |
4,50,000 |
× |
2/10 |
= |
90,000 |
WN
4: Calculation
share of profit distributed
|
A
|
= |
12,00,000 |
× |
3/6 |
= |
6,00,000 |
|
B
|
= |
12,00,000 |
× |
2/6 |
= |
4,00,000 |
|
C
|
= |
12,00,000 |
× |
1/6 |
= |
2,00,000 |
Hidden Goodwill
Question 19:
A, B and C are partners sharing profits in
the ratio of 4/9 : 3/9 : 2/9. B retires and
his capital after making adjustments for reserves and gain (profit) on
revaluation stands at ₹ 1,39,200. A and
C agreed to pay him ₹ 1,50,000 in
full settlement of his claim. Record necessary Journal entry for adjustment of
goodwill if the new profit-sharing ratio is decided at 5 :
3.
Answer:
|
Journal |
|
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit
₹ |
||
|
|
A’s
Capital A/c |
Dr. |
|
5,850 |
|
|
|
|
C’s
Capital A/c |
Dr. |
|
4,950 |
|
|
|
|
To B’s Capital A/c |
|
|
|
10,800 |
|
|
|
(Being Adjustment
of B’s share of goodwill) |
|
|
|
|
|
Working Notes
i. Calculation of B’s share of goodwill
A, B and C are sharing profits in ratio 4/9 : 3/9
: 2/9
B retires from the firm. Remaining partners agreed to pay him ₹ 1,50,000
B’s capital after making necessary adjustments ₹ 1,39,200
Therefore, Hidden Goodwill is ₹ (1,50,000 – 1,39,200) i.e. ₹ 10,800
ii
Gaining Ratio
New
profit sharing ratio between A and B is 5:3
A's Gain=5/8-5/9=13/72
C's Gain=3/8-2/9=11/72
Gaining
ratio 13:11
Thus, B’s
share of goodwill will be brought in by A and C in the gaining ratio 13:11 i.e.
A’s
capital will be debited =10,800×13/24=5850
C’s capital will be debited =10,800×11/24=4950
Question 20: Shivam, Kapil
and Deepak are partners sharing profits in the ratio of 3:1:2. On 31st March, 2024,
Kapil retired and his capital account after
adjustments of reserve and profit on revaluation was ₹3,50,000.
Shivam and Deepak paid him ₹4,20,000 in settlement of his
claim. To settle his account, a computer of ₹4,20,000
was given to Kapil. Pass the necessary Journal
entries in the books of the firm.
Answer:
|
Date |
Particulars |
|
₹ |
₹ |
|
1. |
Shivam’s Capital A/c |
Dr. |
42,000 |
|
|
|
Deepak’s Capital A/c |
Dr. |
28,000 |
|
|
|
To Kapil’s Capital
A/c |
|
|
70,000 |
|
|
(Kapil
was compensated for his share of goodwill ) |
|
|
|
|
2. |
Kapil’s Capital A/c |
Dr. |
4,20,000 |
|
|
|
To Computer A/c |
|
|
4,20,000 |
|
|
(Computer was paid in
consideration of Capital) |
|
|
|
Working notes:
|
Kapil’s capital (after adjustments of reserve and
profit on revaluation) |
= |
₹3,50,000 |
|
Less:
Shivam and Deepak paid him capital in settlement of his claim |
= |
₹4,20,000 |
|
Hidden
Goodwill (Share of Kapil in Goodwill) |
= |
₹ 70,000 |
Shivam and Deepak Pay in 3:2
Shivam
=
70,000 × 3/5= 42,000
Deepak =
70,000 × 2/5= 28,000
Ts Grewal Solution 2025-2026
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Class 12 / Volume – I