Question 41:
X and Y
are partners with capitals of ₹ 50,000 each. They admit Z as a partner for 1/4th
share in the profits of the firm. Z
brings in ₹ 80,000 as his share of capital. The Profit and Loss
Account showed a credit balance of ₹ 40,000 as on date of admission of Z.
Give necessary journal entries to record the goodwill.
Answer:
Total Capital of the firm after Z’s admission = X’s Capital + Y’s Capital + undistributed Profit +
Z’s Capital
= 50,000 + 50,000 + 40,000 + 80,000
= ₹ 2,20,000
Capitalised value of the firm on the basis Z’s share= 80,000×4/1=3,20,000
Goodwill= Capitalised value of the firm – T otal captial after z’s admission
=3,20,000-2,20,000=1,00,000
Question 42:
Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th share in the profits of the firm. Ajay brings ₹ 5,00,000 as his share of capital. The value of the total assets of the firm was ₹ 15,00,000 and outside liabilities were valued at ₹ 5,00,000 on that date. Give necessary Journal entry to record goodwill at the time of Ajay's admission. Also show your workings.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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Ajay’s Capital A/c |
Dr. |
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2,00,000 |
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To Asin’s Capital A/c |
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1,00,000 |
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To Shreya’s Capital A/c |
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1,00,000 |
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(Ajay’s share of goodwill distributed among |
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Working Notes:
Calculation of Goodwill
brought in by Ajay
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Value of firm’s goodwill |
= Capitalised value of the firm – Net worth |
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Capitalised value of the firm |
= Share of Ajay's capital × Reciprocal of Ajay's share = 5,00,000 ×5/1= ₹ 25,00,000 |
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Net worth of the new firm |
= Total assets-Outside liabilities + Ajay's capital = 15,00,000 - 5,00,000 + 5,00,000= ₹ 15,00,000 |
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Value of firm's goodwill |
= Capitalised value of firm - Net worth of the new firm =25,00,000 - 15,00,000 = ₹ 10,00,000 |
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Ajay's share of goodwill
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= 10,00,000 × 1/5 = ₹ 2,00,000 |
Revaluation of Assets and reassessment of Liabilities
Question 43:
Arun and Vijay are partners in a firm sharing profit & loss in the ratio of 3: 2.
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BALANCE SHEET (Extract) |
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Liabilities |
₹ |
Assets |
₹ |
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Machinery |
2,00,000 |
If the value of machinery in the Balance Sheet is excess by 33 1/3, find the value of machinery to be shown in the New Balance Sheet.
Answer:
If the value of machinery in the Balance Sheet is excess by 33 1/3
Then the book value is 100+33 1/3= 133 1/3
Excess Value of Machinery is 2,00,000×33 1/3 ÷ 133 1/3
Or
= 2,00,000×100/3 ×3/400 = 50,000
Value of machinery to be shown in the New Balance Sheet = 2,00,000-50,000= 1,50,000
Question 44:
Pass
entries in firm's Journal for the following on admission of a partner:
(i) Unrecorded Investments worth ₹20,000
are to be accounted.
(ii) Unrecorded liability towards suppliers for ₹ 5,000 is to be accounted.
(iii) An item of ₹ 1,600 included in Sundry Creditors is not likely to
be claimed and hence should be written back.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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(i) |
Investment A/c |
Dr. |
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20,000 |
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To Revaluation A/c |
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20,000 |
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(Investments recorded) |
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(ii) |
Revaluation A/c |
Dr. |
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5,000 |
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To Creditors A/c |
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5,000 |
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(Liability recorded) |
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(iii) |
Creditors A/c |
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To Revaluation A/c |
Dr |
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1,600 |
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(Liability decreased) |
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1,600 |
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Question 45:
X and Y are partners sharing profits in the ratio of 3 : 2. They admitted Z as a partner for 1/4th share of profits. At the time of admission of Z, Investments appeared at ₹ 80,000. Half of the investments to be taken by X and Y in their profit-sharing ratio at book value. Remaining investments were valued at ₹ 50,000. Pass the necessary Journal entries.
Answer:
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Journal |
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Date |
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
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(i) |
X’s Capital A/c |
Dr. |
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24,000 |
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Y’s Capital A/c |
Dr. |
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16,000 |
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To Investments A/c |
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40,000 |
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(Half of the investments taken over by X and Y) |
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(ii) |
Investment A/c |
Dr. |
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10,000 |
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To Revaluation A/c |
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10,000 |
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(Value of investments increased) |
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(iii) |
Revaluation A/c |
Dr. |
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10,000 |
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To X’s Capital A/c |
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6,000 |
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To Y’s Capital A/c |
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4,000 |
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(Profit on revaluation transferred to Partners’ Capital A/c) |
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Ts Grewal Solution 2026-2027
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Class 12 / Volume – I