Question 21:
Gold and Silver are partners sharing profits and losses in the ratio of 2 : 5. They admit Copper on the condition that he will bring ₹ 14,000 as his share of goodwill to be distributed between Gold and Silver. Copper's share in the future profits or losses will be 1/4th. What will be the new profit-sharing ratio and what amount of goodwill brought in by Copper will be received by Gold and Silver?
Answer;
|
|
A |
B |
|
OLD RATION |
2 : |
5 |
C is admitted for 1/4share
Let the combined share of A, B and C be = 1
Combined share of A and B after C’s admission = 1 − C’s share
=1-1/4
=3/4
New Ratio = Old Ratio - Combined share of A and B
|
A’s |
=2/7×3/4 |
|
|
=6/28 |
|
B’s |
=5/7×3/4 |
|
|
=15/28 |
New profit sharing ratio=
|
A |
|
B |
|
C |
|
6/28 |
: |
15/28 |
: |
1/4 |
|
6/28 |
: |
15/28 |
: |
7/28 |
|
6 |
: |
15 |
: |
7 |
Distribution of C’s share of Goodwill OR A and B will be covered
C’s share of Goodwill = ₹ 14,000
A will get =14,000×2/7=4,000
B will get =14,000×5/7=10,000
Question 22:
Pass
Journal entries to record the following arrangements in the books of the firm:
(a) B and C are partners sharing profits in the ratio of 3 :
2. D is admitted paying a premium (goodwill) of ₹ 2,000 for 1/4th share of the profits, shares shares
of B and C remain as before.
(b) B and C are partners sharing profits in the ratio of 3 :
2. D is admitted paying a premium of ₹ 2,100 for 1/4th share of profits which he acquires
1/6th from B and 1/12th from C.
Answer:
(a)
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
2,000 |
|
|
|
To Premium for Goodwill A/c |
|
|
|
2,000 |
|
|
(D brought Premium for Goodwill) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
2,000 |
|
|
|
To B’s Capital A/c |
|
|
|
1,200 |
|
|
To C’s Capital A/c |
|
|
|
800 |
|
|
(Premium for Goodwill distributed between B and C in sacrificing ratio i.e. 3:2) |
|
|
|
|
|
|
|
|
|
|
|
Working Note:
Distribution of premium for Goodwill-
B will get =2,000×3/5=1,200
A will get =2,000×2/5=800
(b)
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Cash A/c |
Dr. |
|
2,100 |
|
|
|
To Premium for Goodwill A/c |
|
|
|
2,100 |
|
|
(D brought his share of goodwill in cash) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
2,100 |
|
|
|
To B’s Capital A/c |
|
|
|
1,400 |
|
|
To C’s Capital A/c |
|
|
|
700 |
|
|
(Premium for Goodwill brought distributed between B and C in sacrificing Ratio i.e. 2:1) |
|
|
|
|
|
|
|
|
|
|
|
Working Note:
WN1
|
|
B |
|
C |
|
Sacrificing ratio = |
1/6 |
: |
1/12 |
|
|
2 |
: |
1 |
WN2
Distribution of Premium for Goodwill-
B will get =21,00×2/3=1.400
C will get =21,00×1/3=700
Question 23:
B and C are in partnership sharing profits and losses as 3 : 1. They admit D into the firm, D pays premium of ₹ 15,000 for 1/3rd share of the profits. As between themselves, B and C agree to share future profits and losses equally. Draft Journal entries showing appropriations of the premium money.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
15,000 |
|
|
|
To Premium for Goodwill A/c |
|
|
|
15,000 |
|
|
(D brought his share of goodwill in cash) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
15,000 |
|
|
|
To B’s Capital A/c |
|
|
|
15,000 |
|
|
(Premium for goodwill transferred to B’s Capital) |
|
|
|
|
|
|
|
|
|
|
|
|
|
C’s Capital A/c |
Dr. |
|
3,750 |
|
|
|
To B’s Capital A/c |
|
|
|
3,750 |
|
|
(Goodwill
charged from C’s Capital Account due |
|
|
|
|
|
|
|
|
|
|
|
WN1
Calculation of Sacrificing Ratio:
Let combined share of all partners after D’s admission be = 1
Combined share of B and C after C’s admission be = 1
=1-1/3
=2/3
B and C each share of profit after D’s admission will be
|
=2/3×1/2 |
|
=2/6 =1/3 each |
Sacrificing Ratio =Old ratio- new ratio
|
A’s |
=3/4-1/3 |
|
|
=5/12 (Sacrifice) |
|
B’s |
=1/4-1/3 |
|
|
=-1/12(gain) |
WN2
C is gaining in new the firm. Hence, C’s gain in goodwill will be debited to his capital and given to B (sacrificing partner).
Goodwill of the firm= premium of Goodwill brought by D × reciprocal of D’s share
=15,000×3/1=45,000
C’s share of gain in goodwill= goodwill of the firm × C’s share of gain
=45,000×1/12=3,750
Question 24:
X and Y are
in partnership sharing profits and losses in the ratio of 5 : 3. Z is admitted as a
partner who pays ₹ 40,000 as capital and the necessary amount of goodwill which
is valued at ₹ 60,000 for the firm. His share of profits will be 1/5th
which he takes 1/10th from X
and 1/10th from Y.
Pass Journal entries and also calculate future profit-sharing ratio of the
partners.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
Cash A/c |
Dr. |
|
52,000 |
|
|
|
To Z’s Capital A/c |
|
|
|
40,000 |
|
|
To Premium for Goodwill A/c |
|
|
|
12,000 |
|
|
(C brought Capital and his share of goodwill in cash) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
12,000 |
|
|
|
To X’s Capital A/c |
|
|
|
6,000 |
|
|
To Y’s Capital A/c |
|
|
|
6,000 |
|
|
(Z’s share of Goodwill distributed in X and Y) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes-
WN1
|
|
X |
|
Y |
|
Sacrificing Ratio = |
1/10 |
: |
1/10 |
|
|
1 |
|
1 |
WN2
Calculation of new profit sharing Ratio
|
|
X |
Y |
|
OLD RATION |
5 : |
3 |
New ratio= old ratio – sacrificing ratio
|
X’s |
=5/8-1/10 |
|
|||||
|
|
=21/40 |
|
|||||
|
Y’s |
=3/8-1/10 |
|
|||||
|
|
=11/40 |
|
|||||
|
|
X |
|
Y |
|
Z |
|||
|
New profit sharing ratio = |
21/40 |
: |
11/40 |
: |
1/5 |
|||
|
= |
21/40 |
: |
11/40 |
: |
8/40 |
|||
WN3
Distribution of C’s share of Goodwill (inSacrificing Ratio)
X and Y each will get =12,000×1/2=6,000
Question 25:
Geeta and Meeta are partners in a firm sharing profits in the ratio of 3 : 2. They admit Anita as a new partner. The new profit-sharing ratio between Geeta, Meeta and Anita will be 5 : 3 : 2. Anita brought in ₹25,000 for his share of premium for goodwill. Pass necessary Journal entries for the treatment of goodwill.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
25,000 |
|
|
|
To Premium for Goodwill A/c |
|
|
|
25,000 |
|
|
(Anita brought his share of goodwill in cash) |
|
|
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
25,000 |
|
|
|
To Geeta’s Capital A/c |
|
|
|
12,500 |
|
|
To Meeta’s Capital A/c |
|
|
|
12,500 |
|
|
(Ania’s share of Goodwill distributed in Geeta and Meeta in their sacrificing Ratio) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1
Calculating of Sacrificing Ratio
Sacrificing Ratio =Old ratio- new ratio
|
Geeta’s |
=3/5-5/10 |
|
|||
|
|
=1/10 |
|
|||
|
Meeta’s |
=2/5-3/10 |
|
|||
|
|
=1/10 |
|
|||
|
|
Geeta |
|
Meeta |
|||
|
Sacrificing Ratio = |
1/10 |
: |
1/10 |
|||
|
|
1 |
|
1 |
|||
WN2
Distribution of Geeta’s share of Goodwill-
Geeta and Meeta each will get =25,000×1/2=12,500
Ts Grewal Solution 2026-2027
Click below for more Questions
Class 12 / Volume – I