Double
Entry Book Keeping Ts Grewal Volume I 2021-2022 Solutions for Class 12
Commerce
Accountancy Chapter 5 - Admission Of A
Partner
Page No 5.87:
Question 21:
Give 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 |
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Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
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Cash A/c |
Dr. |
|
2,000 |
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To Premium for Goodwill A/c |
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2,000 |
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(D brought Premium for Goodwill) |
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Premium for Goodwill A/c |
Dr. |
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2,000 |
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To B’s Capital A/c |
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1,200 |
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To C’s Capital A/c |
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|
800 |
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(Premium for Goodwill distributed between B and C in sacrificing ratio i.e. 3:2) |
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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 |
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Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
Cash A/c |
Dr. |
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2,100 |
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To Premium for Goodwill A/c |
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2,100 |
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(D brought his share of goodwill in cash) |
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Premium for Goodwill A/c |
Dr. |
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2,100 |
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To B’s Capital A/c |
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1,400 |
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To C’s Capital A/c |
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700 |
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(Premium for Goodwill brought distributed between B and C in sacrificing Ratio i.e. 2:1) |
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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
Page No 5.87:
Question 22:
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 |
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Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
15,000 |
|
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To Premium for Goodwill A/c |
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|
15,000 |
|
(D brought his share of goodwill in cash) |
|
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Premium for Goodwill A/c |
Dr. |
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15,000 |
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To B’s Capital A/c |
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15,000 |
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(Premium for goodwill transferred to B’s Capital) |
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C’s Capital A/c |
Dr. |
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3,750 |
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To B’s Capital A/c |
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3,750 |
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(Goodwill
charged from C’s Capital Account due |
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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
Page No 5.87:
Question 23:
Geeta and Sunita
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, Sunita
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 |
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Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
|
|
|
|
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Cash A/c |
Dr. |
|
25,000 |
|
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To Premium for Goodwill A/c |
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25,000 |
|
(Anita brought his share of goodwill in cash) |
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Premium for Goodwill A/c |
Dr. |
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25,000 |
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To Geeta’s Capital A/c |
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12,500 |
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To Sunita’s Capital A/c |
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12,500 |
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(Ania’s share of Goodwill distributed in Geeta and Sunita in their sacrificing Ratio) |
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Working Notes:
WN1
Calculating of Sacrificing Ratio
Sacrificing
Ratio =Old ratio- new ratio
|
Geeta’s |
=3/5-5/10 |
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=1/10 |
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Sunita’s |
=2/5-3/10 |
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=1/10 |
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Geeta |
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Sunita |
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Sacri ficing Ratio = |
1/10 |
: |
1/10 |
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1 |
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1 |
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WN2
Distribution of Geeta’s share of Goodwill-
Geeta and Sunita each will get =25,000×1/2=12,500
Page No 5.87:
Question 24:
A and B
are in partnership sharing profits and losses in the ratio of 5 : 3. C
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 A and 1/10th from B.
Pass Journal entries and also calculate future profit-sharing ratio of the
partners.
Answer:
Journal |
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Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
Cash A/c |
Dr. |
|
52,000 |
|
|
To C’s Capital A/c |
|
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40,000 |
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To Premium for Goodwill A/c |
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12,000 |
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(C brought Capital and his share of goodwill in cash) |
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Premium for Goodwill A/c |
Dr. |
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12,000 |
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To A’s Capital A/c |
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6,000 |
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To B’s Capital A/c |
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6,000 |
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(C’s share of Goodwill distributed in A and B) |
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Working Notes-
WN1
|
A |
|
B |
Sacrificing Ratio = |
1/10 |
: |
1/10 |
|
1 |
|
1 |
WN2
Calculation of new profit sharing Ratio
|
A |
B |
OLD
RATION |
5 : |
3 |
New
ratio= old ratio – sacrificing ratio
|
A’s |
=5/8-1/10 |
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=21/40 |
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B’s |
=3/8-1/10 |
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=11/40 |
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|
X |
|
Y |
|
Z |
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New profit sharing ratio = |
21/40 |
: |
11/40 |
: |
1/5 |
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= |
21/40 |
: |
11/40 |
: |
8/40 |
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WN3
Distribution of C’s share of Goodwill (in Sacrificing Ratio)
A and B each will get =12,000×1/2=6,000
Page No 5.87:
Question 25:
X and Y
are partners sharing profits in the ratio of 3: 1. Z is admitted as a
partner for which he pays ` 30,000 for goodwill in cash. X, Y and Z
decide to share the future profits equally.
Pass
an adjustment Journal entry to give effect to the above arrangement.
Answer:
Journal |
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Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
30,000 |
|
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To Premium for Goodwill A/c |
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30,000 |
|
(X brought his share of goodwill) |
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Premium for Goodwill A/c |
Dr. |
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30,000 |
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Y’s Capital A/c |
Dr. |
|
7,500 |
|
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To X’s Capital A/c |
|
|
|
37,500 |
|
(Y and Z share
of gain in goodwill transferred |
|
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|
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Working Notes:
WN1
Calculation of Sacrificing Ratio
New
ratio= old ratio – Sacrificing Ratio
X’s |
=2/4-1/3 |
|
=5/12 |
Y’s |
=1/4-1/3 |
|
=-1/12 |
WN2
Goodwill of the firm on the basis of Z’s share
Share of Z = 1/3
Premium he brought for his share =30,000
So, firms’s goodwill=30,000×3/1=90,000
X will get as a goodwill = Z’s share of Goodwill + Y’s gain in Goodwill=30,000×3/1
=90,000
B’s share in goodwill
=90,000×1/12=7,500
= 30,000 + 7,500
= ` 37,500
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