Volume-1 | Chapter-5 | Question: 41 to 45 | Admission Of A Partner | Ts grewal solution 2020-21 | Class-12th

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
the old partners in their sacrificing ratio 1:1.)

 

 

 

 

 

 

 

 

 

 


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


Bank A/c

 
Dr.

 


3,00,000

 

 

   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
through current accounts)

 

 

 

 

 

 

 

 

 

 


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
April 1


Cash A/c


Dr.

 


50,000

 

 

Machinery A/c

Dr.

 

70,000

 

 

To Premium for Goodwill A/c

 

 

1,20,000

 

(G brought cash    ` 50,000 and Machinery
   ` 70,000 for his share of Goodwill)

 

 

 

 

 

 

 

 

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

 


Click on Below link for more questions Of Volume-1 | 
Chapter-5: Admission Of A Partner 2020

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