Page No 5.90:
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
Page No 5.90:
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:
Journal |
|
|||||
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
||
|
Ajay’s Capital A/c |
Dr. |
|
2,00,000 |
|
|
|
To Asin’s Capital A/c |
|
|
|
1,00,000 |
|
|
To Shreya’s Capital A/c |
|
|
|
1,00,000 |
|
|
(Ajay’s
share of goodwill distributed among |
|
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
Calculation of Goodwill brought in by Ajay
Value of firm’s goodwill |
= Capitalised value of the firm – Net worth |
Capitalised value of the firm |
= Share of Ajay's capital × Reciprocal of Ajay's share = 5,00,000 ×51= ` 25,00,000 |
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 |
Value of firm's goodwill |
= Capitalised value of firm - Net worth of the new firm =25,00,000 - 15,00,000 = ` 10,00,000 |
Ajay's share of goodwill |
= 10,00,000 × 1/5 = ` 2,00,000 |
Page No 5.90:
Question 43:
Verma and Sharma are partners in a firm sharing
profits and losses in the ratio of 5 : 3. They
admitted Ghosh as a new partner for 1/5th share of
profits. Ghosh is to bring in ` 20,000 as capital and ` 4,000 as his share of goodwill
premium. Give the necessary Journal entries:
(a) When the amount of goodwill is retained in the business.
(b) When the amount of goodwill is fully withdrawn.
(c) When 50% of the amount of goodwill is withdrawn.
(d) When goodwill is paid privately.
Answer:
Journal Entries |
|||||
S.No. |
Particulars |
L.F. |
Debit
Amount ` |
Credit
Amount ` |
|
Case (a) |
|
|
|
|
|
|
Cash
A/c |
Dr. |
|
24,000 |
|
|
To
Ghosh's Capital A/c |
|
|
|
20,000 |
|
To
Premium for Goodwill A/c |
|
|
|
4,000 |
|
(Capital
and Goodwill his share broughtby Ghosh) |
|
|
|
|
|
|
|
|
|
|
|
Premium
for Godwill A/c |
Dr. |
|
4,000 |
|
|
To
Verma's Capital A/c |
|
|
|
2,500 |
|
To
Sharma's Capital A/c |
|
|
|
1,500 |
|
(Goodwill brought by Ghosh credited to Old Partnersin
Sacrificing ratio) |
|
|
|
|
|
|
|
|
|
|
Case (b) |
Cash
A/c |
Dr. |
|
24,000 |
|
|
To
Ghosh Capital A/c |
|
|
|
20,000 |
|
To
Premium for Goodwill A/c |
|
|
|
4,000 |
|
(Capital
and Goodwill brought by Ghosh for (1/5)share of
profit) |
|
|
|
|
|
|
|
|
|
|
|
Premium
for Goodwill A/c |
Dr. |
|
4,000 |
|
|
To
Verma's Capital A/c |
|
|
|
2,500 |
|
To
Sharma's Capital A/c |
|
|
|
1,500 |
|
(Goodwill brought by Ghosh credited in Old Partner in Sacrificing Ratio) |
|
|
|
|
|
|
|
|
|
|
|
Verma's Capital A/c |
Dr. |
|
2,500 |
|
|
Sharma's
Capital A/c |
Dr. |
|
1,500 |
|
|
To
Cash A/c |
|
|
|
4,000 |
|
(Amount
of Premium for Goodwill withdrawn byOld Partners) |
|
|
|
|
|
|
|
|
|
|
Case (c) |
Cash
A/c |
Dr. |
|
24,000 |
|
|
To
Ghosh's Capital A/c |
|
|
|
20,000 |
|
To
Premium for Goodwill A/c |
|
|
|
4,000 |
|
(Capital
and Goodwill brought by Ghosh for (1/5)share of
profit) |
|
|
|
|
|
|
|
|
|
|
|
Premium
for Goodwill A/c |
Dr. |
|
4,000 |
|
|
To
Verma's Capital A/c |
|
|
|
2,500 |
|
To
Sharma's Capital A/c |
|
|
|
1,500 |
|
(Premium for Goodwill
credited to Old Partner's Capital Account in sacrificing ratio) |
|
|
|
|
|
|
|
|
|
|
|
Verma's Capital A/c |
Dr. |
|
1,250 |
|
|
Sharma's
Capital A/c |
|
|
750 |
|
|
To
Cash A/c |
|
|
|
2,000 |
|
(Half of the amount of
premium for goodwill withdrawn by Old partners) |
|
|
|
|
|
|
|
|
|
|
Case (d) |
No
entry: Goodwill was not brought into firm |
|
|
|
Page No 5.90:
Question 44:
Disha and Divya are partners in a firm sharing profits in the ratio of 3 : 2 respectively. The fixed capital of Disha is ` 4,80,000 and of Divya is ` 3,00,000. On 1st April, 2019 they admitted Hina as a new partner for 1/5th share in future profits. Hina brought ` 3,00,000 as her capital. Calculate value of goodwill of the firm and record necessary Journal entries on Hina's admission.
Answer:
Journal |
|
|||||
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
||
2019 April 1 |
|
|
|
|
|
|
|
To Hina’s Capital A/c |
|
|
|
3,00,000 |
|
|
(Capital brought in by Hina) |
|
|
|
|
|
April 1 |
Hina’s Current A/c |
Dr. |
|
84,000 |
|
|
|
To Disha’s Current A/c |
|
|
|
50,400 |
|
|
To Divya’s Current A/c |
|
|
|
33,600 |
|
|
(Hina’s Share of Goodwill adjusted |
|
|
|
|
|
|
|
|
|
|
|
|
Working Note:
Calculation of Hidden Goodwill
Total capital of the firm on the basis of Hina’s capital=(3,00,000×5/1)= |
15,00,000 |
Less- adjusted cpital of partners + new partner’s capital= |
(10,80,000) |
|
4,20,000 |
|
|
Hina’s
share of goodwill=4,20,000×1/5=84,000
Page No 5.90:
Question 45:
E
and F were
partners in a firm sharing profits in the ratio of 3 :
1. They admitted G as a new partner on 1st April, 2019 for 1/3rd
share. It was decided that E, F and G will share
future profits equally. G brought ` 50,000 in cash and machinery valued at ` 70,000 as premium for goodwill.
Pass necessary Journal entries in the books of the firm.
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount ` |
Credit Amount ` |
|
2019 |
|
|
|
|
|
|
Machinery A/c |
Dr. |
|
70,000 |
|
|
To Premium for Goodwill A/c |
|
|
1,20,000 |
|
|
(G brought cash ` 50,000 and Machinery |
|
|
|
|
|
|
|
|
|
|
April 1 |
Premium for Goodwill A/c |
Dr. |
|
1,20,000 |
|
|
To E’s Capital A/c |
|
|
1,20,000 |
|
|
(G share of goodwill transferred to E’s Capital Account) |
|
|
|
|
|
|
|
|
|
|
April 1 |
F’s Capital A/c |
Dr. |
|
30,000 |
|
|
To E’s Capital A/c |
|
|
30,000 |
|
|
(F’s share of gain in goodwill charged from his capital and transferred to E’s capital) |
|
|
|
|
|
|
|
|
|
Working Notes:
WN1
|
E |
F |
G |
OLD RATION |
3 : |
1: |
|
NEW RATIO |
1 : |
1 : |
1 : |
Sacrificing
Ratio =Old ratio- new ratio
E’s |
=3/4-1/3 |
|
=5/12 |
F’s |
=1/4-1/3 |
|
= -1/12 |
WN2
Calculation of F’s share of gain in goodwill
G’s share of Goodwill = 50,000 + 70,000 = ` 1, 20,000
Goodwill of the firm on the basis of G’s share =120000×3/1=3,60,000
F’s share of gain in goodwill =3,60,000×1/12=30,000