# Volume-1 | Chapter-5 | Question: 16 to 20 | Admission Of A Partner | Ts grewal solution 2020-21 | Class-12th

#### Question 16:

P and Q are partners sharing profits in the ratio of 3 : 2. They admit R into partnership who acquires 1/5th of his share from P and 4/25th share from Q. Calculate New Profit-sharing Ratio and Sacrificing Ratio.

Calulation of New Profit Sharing Ratio

P:Q=3:2 (Old Ratio)

R acquires 1/5th of his share from P And,

Remaining 4/5th (1−1/5) of his share from Q.

If 4/5th share of R=4/25

R's share=4/25×54=5/25

P's sacrifice=1/5×1/5=1/25

Q's sacrifice=4/25

P's new share=3/5−1/25=1/5−1/25=14/25

Q's new share=2/5−4/25=10−4/25=6/25

R's new share=1/5×5/5=5/25

P:Q:R=14:6:5

Sacrificing Ratio=1:4

#### Question 17:

 Journal Date Particulars L.F. Debit Amount    ` Credit Amount    ` Cash A/c Dr. 14,000 To Premium for Goodwill A/c 14,000 (c brought Premium for Goodwill) Premium for Goodwill A/c Dr. 14,000 To A’s Capital A/c 4,000 To B’s Capital A/c 10,000 (Premium for Goodwill distributed between B and C in sacrificing ratio i.e. 3:2)

#### Question 18:

A and B are partners sharing profits and losses in the ratio of 2 : 5. They admit C on the condition that he will bring    ` 14,000 as his share of goodwill to be distributed between A and B. C'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 will be received by A and B

 A B OLD RATION 2  : 5

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

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 19:

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.

(a)

 Journal Date Particulars L.F. Debit Amount    ` Credit Amount    ` 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:

B will get =2,000×3/5=1,200

A will get =2,000×2/5=800

(b)

 Journal Date Particulars L.F. Debit Amount    ` Credit Amount    ` 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

B will get =21,00×2/3=1.400

C will get =21,00×1/3=700

#### Question 20:

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.

 Journal Date Particulars L.F. Debit Amount    ` Credit Amount    ` 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 to his gain in profit sharing)

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 brough by D × reciprocal of D’s share

=15,000×3/1=45,000

C’s share of gain in goodwill= goodwill of the×firm share of gain

=45,000×1/12=3,750