Double Entry Book Keeping Ts Grewal 2016 Solutions for Class 12 Commerce Accountancy Chapter 4 Admission Of A Partner are provided here with simple step-by-step explanations. These solutions for Admission Of A Partner are extremely popular among Class 12 Commerce students for Accountancy Admission Of A Partner Solutions come handy for quickly completing your homework and preparing for exams. All questions and answers from the Double Entry Book Keeping Ts Grewal 2016 Book of Class 12 Commerce Accountancy Chapter 4 are provided here for you for free. You will also love the ad-free experience on Meritnation’s Double Entry Book Keeping Ts Grewal 2016 Solutions. All Double Entry Book Keeping Ts Grewal 2016 Solutions for class Class 12 Commerce Accountancy are prepared by experts and are 100% accurate.
Page No 4.67:
Answer:
Old Ratio of A and B = 21 : 9
Let the total share be = 1
Page No 4.67:
Answer:
Ashok admits for share of profit
Ravi sacrifices in favour of Ashok =
Mukesh sacrifices in favour of Ashok =
New Ratio = Old Ratio − Sacrificing Ratio
Page No 4.67:
Answer:
Old ratio of A and B = 7 : 3
Page No 4.67:
Answer:
Old Ratio = 1 : 1
Let the total share be = 1
Page No 4.67:
Answer:
(i) Let the total share be = 1
W is admitted for share
Z’s share =
(ii) Old Ratio = 3 : 2 : 5
Page No 4.67:
Answer:
Old ratio = 3 : 2
Let the total share be = 1
Note: When nothing has been specified about the new profit sharing ratio, it has been assumed that the sacrificing ratio will be same as old ratio, i.e. 3 : 2.
Page No 4.67:
Answer:
Sacrificing Share = Old Ratio − New Ratio
Page No 4.67:
Answer:
Old ratio = 3 : 2
Page No 4.67:
Answer:
Profit sharing ratio of A and B = 4 : 1
Thus, Profit sharing ratio of B and C will also be 4 : 1
Let B’s Profit Share = 1
Since, C’s share of profit is 25% of B’s Profit Share
A’s Profit Share is 4 times the B’s Profit Share, thus, A’s Profit Share = 4
New Profit Share = 4 : 1 : 0.25 or 16 : 4 : 1
Sacrificing Ratio = Old Ratio – New Ratio
Page No 4.67:
Answer:
Sacrificing Ratio = Old Ratio × Surrender Ratio
New Ratio = Old Ratio − Sacrificing Ratio
P’s share = X’s Sacrifiece
Q’s share = Y’s Sacrifice
Page No 4.67:
Answer:
Sacrificing Ratio = Old Ratio × Surrender Ratio
New Ratio = Old Ratio − Sacrificing Ratio
∴New Profit Sharing Ratio = 75 : 48 : 37
Page No 4.67:
Answer:
Sacrificing Ratio = Old Ratio − Sacrificing Ratio
Page No 4.67:
Answer:
D is admitted for share of profit
Let the combined share of profit of A, B C and D be = 1
Combined share of A, B and C after D’s admission = 1 − D’s shares
New Ratio = Old Ratio × combined share of A, B and C
Sacrificing Ratio = Old Ratio − New Ratio
Page No 4.67:
Answer:
E is admitted for share
Let combined share of profit of all partners after E’s admission = 1
Combined share of A, B, C and D after E’s admission = 1 − E’s Share
New Ratio = Combined of A, B, C and D × Agreed Share of A, B, C and D
Page No 4.67:
Answer:
Old ratio = 3 : 2
Let the total share be = 1
Page No 4.68:
Answer:
Since goodwill has been paid privately, thus, no entry will be recorded in the books of the firm.
Page No 4.68:
Answer:
Since goodwill has been paid privately, thus, no entry will be recorded in the books of the firm.
Page No 4.68:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
48,000
|
||||
To Premium for Goodwill A/c |
48,000
|
|||||
(Goodwill brought in by the new partner) | ||||||
Premium for Goodwill A/c |
Dr.
|
48,000
|
||||
To X’s Capital A/c |
28,800
|
|||||
To Y’s Capital A/c |
19,200
|
|||||
(Goodwill distributed among old partners in their sacrificing ratio) | ||||||
Working Notes:
Let the total share = 1
Z is admitted for share
Note: When nothing has been specified about the new profit sharing ratio, it has been assumed that the sacrificing ratio will be same as old ratio, i.e. 3 : 2.
Page No 4.68:
Answer:
|
Books of...
|
|||||
|
Journal
|
|||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
10,000
|
|
|||
To Premium for Goodwill A/c |
|
|
10,000
|
|||
(Goodwill brought in by the new partner) |
|
|
|
|||
|
|
|
||||
Premium for Goodwill A/c |
Dr.
|
10,000
|
|
|||
F’s Capital A/c |
Dr.
|
2,000
|
|
|||
To E’s Capital A/c |
|
|
12,000
|
|||
(Goodwill distributed among old partners in their sacrificing ratio) |
|
|
|
Working Notes
Sacrificing ratio = Old ratio – New ratio
Old ratio between E and F = 4 : 1
New ratio between E, F and G = 2 : 1 : 1
Value of Firm’s Goodwill = 10,000 × 4 = Rs 40,000
Page No 4.68:
Answer:
Books of...
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
1,10,000
|
||||
To Premium for Goodwill A/c |
30,000
|
|||||
To Z’s Capital A/c |
80,000
|
|||||
(Capital and goodwill brought in by the new partner) | ||||||
Premium for Goodwill A/c |
Dr.
|
30,000
|
||||
To X’s Capital A/c |
10,000
|
|||||
To Y’s Capital A/c |
20,000
|
|||||
(Goodwill distributed among old partners in their sacrificing ratio) |
Partners’ Capital Accounts |
|||||||||
Dr. |
Cr.
|
||||||||
Particulars
|
X
|
Y
|
Z
|
Particulars
|
X
|
Y
|
Z
|
||
Balance c/d |
2,10,000
|
1,20,000
|
80,000
|
Balance b/d |
2,00,000
|
1,00,000
|
|||
Bank A/c |
80,000
|
||||||||
Premium for Goodwill A/c |
10,000
|
20,000
|
|||||||
2,10,000
|
1,20,000
|
80,000
|
2,10,000
|
1,20,000
|
80,000
|
||||
Working Notes:
Old ratio = 2 : 1
Z is admitted for share
New ratio = 3 : 1 : 1
Sacrificing ratio = Old ratio – New Ratio
Page No 4.68:
Answer:
Books of…
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit
Amount Rs
|
Credit
Amount Rs
|
||
Bank A/c |
Dr.
|
91,500
|
|
|||
To Premium for Goodwill A/c |
|
31,500
|
||||
To Samir’s Capital A/c |
|
|
60,000
|
|||
(Capital and goodwill brought in by the new partner) |
|
|
|
|||
|
|
|
||||
Premium for Goodwill A/c |
Dr.
|
31,500
|
|
|||
Satish’s Capital A/c |
Dr.
|
7,500
|
|
|||
To Sushil’s Capital A/c |
|
39,000
|
||||
(Goodwill distributed among old partners in their sacrificing ratio) |
|
|
|
|||
|
|
|
Partners’ Capital Accounts |
|||||||||
Dr. |
Cr.
|
||||||||
Particulars
|
Sushil
|
Satish
|
Samir
|
Particulars
|
Sushil
|
Satish
|
Samir
|
||
|
|
|
|
|
|
||||
Sushil’s Capital A/c |
|
7,500
|
|
Balance b/d |
48,000
|
42,000
|
|
||
Balance c/d |
87,000
|
34,500
|
60,000
|
Bank A/c |
|
|
60,000
|
||
|
|
|
Premium for Goodwill A/c |
31,500
|
|
|
|||
|
|
|
Satish’s Capital A/c |
7,500
|
|
|
|||
87,000
|
42,000
|
60,000
|
87,000
|
42,000
|
60,000
|
||||
|
|
|
|
|
|
as on April 01, 2016 after Samir’s admission
|
|||||
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
||
Bank Loan |
23,000
|
Bank |
97,500
|
||
Creditors |
55,000
|
Stock |
12,000
|
||
Capital A/cs: |
|
Plant & Machinery |
30,000
|
||
Sushil |
87,000
|
|
Debtors |
18,300
|
|
Satish |
34,500
|
|
Less : Provision for Doubtful Debts |
300
|
18,000
|
Samir |
60,000 |
1,81,500
|
Building |
1,02,000
|
|
2,59,500
|
2,59,500
|
||||
|
|
Working Notes:
Old ratio = 5 : 2
New ratio = 2 : 3 : 3
Sacrificing ratio = Old ratio – New ratio
Bank Account
|
|||||
Dr. |
Cr.
|
||||
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
||
|
|
||||
Balance b/d |
6,000
|
Balance c/d |
97,500
|
||
Premium for Goodwill A/c |
31,500
|
|
|||
Samir’s Capital A/c |
60,000
|
||||
97,500
|
97,500
|
||||
|
|
Page No 4.68:
Answer:
C is admitted for share
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
New Ratio = Old Ratio × Combined share of A and B
Distribution of C’s share of Goodwill
C’s share of Goodwill = Rs 14,000
Page No 4.69:
Answer:
Journal Entries |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
A’s Capital A/c |
Dr. |
|
1,800 |
|
|
B’s Capital A/c |
Dr. |
|
1,200 |
|
|
To Goodwill A/c |
|
|
|
3,000 |
|
(Goodwill written-off) |
|
|
|
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
40,000 |
|
|
To C’s Capital A/c |
Dr. |
|
|
30,000 |
|
To Premium for Goodwill A/c |
|
|
|
10,000 |
|
(C brought capital and his share of goodwill in cash) |
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill |
Dr. |
|
10,000 |
|
|
To A’s Capital A/c |
|
|
|
5,000 |
|
To B’s Capital A/c |
|
|
|
5,000 |
|
(Premium for Goodwill distributed) |
|
|
|
|
|
|
|
|
|
|
Sacrificing Ratio = Old Ratio − New Ratio
Distribution of Premium for Goodwill C’s share of Goodwill)
Goodwill written-off
Page No 4.69:
Answer:
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
Cash A/c |
Dr. |
|
21,000 |
|
|
To Premium for Goodwill A/c |
|
|
|
21,000 |
|
(C brought Premium for Goodwill) |
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
21,000 |
|
|
To A’s Capital A/c |
|
|
|
9,000 |
|
To B’s Capital A/c |
|
|
|
12,000 |
|
(Premium for Goodwill brought by C distributed between A and B in sacrificing ratio i.e. 3:4) |
|
|
|
|
|
|
|
|
|
|
C’s share = A’s sacrifice + B’s sacrifice
New Ratio is 12:6:7
C’s will bring Premium for Goodwill
Distribution of Premium for Goodwill-
Page No 4.69:
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
Stock A/c |
Dr. |
|
60,000 |
|
|
Debtors A/c |
Dr. |
|
80,000 |
|
|
Land A/c |
Dr. |
|
1,00,000 |
|
|
Plant and Machinery A/c |
Dr. |
|
40,000 |
|
|
To Z’s Capital A/c |
|
|
1,30,000 |
|
|
To Premium for Goodwill A/c |
|
|
1,50,000 |
|
|
(Z brought assets for his share of goodwill and Capital) |
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
1,50,000 |
|
|
To X’s Capital A/c |
|
|
90,000 |
|
|
To Y’s Capital A/c |
|
|
60,000 |
|
|
(Z’s share of Goodwill distributed between X and Y in sacrificing ratio) |
|
|
|
|
|
|
|
|
|
Working Notes:
WN1
WN2
Distribution of Z’s Goodwill
Page No 4.69:
Answer:
Books of...
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
2,36,000
|
||||
To Premium for Goodwill A/c |
36,000
|
|||||
To Amit’s Capital A/c |
2,00,000
|
|||||
(Capital and goodwill brought in by the new partner) | ||||||
Premium for Goodwill A/c |
Dr.
|
36,000
|
||||
To Sachin’s Current A/c |
3,600
|
|||||
To Kapil’s Current A/c |
32,400
|
|||||
(Goodwill distributed among old partners in their sacrificing ratio) | ||||||
Sachin’s Current A/c |
Dr.
|
3,600
|
||||
Kapil’s Current A/c |
Dr.
|
32,400
|
||||
To Bank A/c |
36,000
|
|||||
(Goodwill withdrawn by the old partners) | ||||||
Working Notes
Page No 4.69:
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
13,000 |
|
|
To C’s Capital A/c |
|
|
10,000 |
|
|
To Premium for Goodwill A/c |
|
|
3,000 |
|
|
(C brought capital and Premium for Goodwill) |
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
3,000 |
|
|
To A’s Capital A/c |
|
|
3,000 |
|
|
(Premium for Goodwill transferred to A’s Capital) |
|
|
|
|
|
|
|
|
|
|
|
A’s Capital A/c |
Dr. |
|
3,000 |
|
|
To Cash A/c |
|
|
|
3,000 |
|
(Premium for Goodwill withdrawn) |
|
|
|
|
|
|
|
|
|
Working Notes:
Calculation of Sacrificing Ratio
Here only A is sacrificing his share of profit in favour of C. Hence, A will get the whole amount of premium for goodwill.
Page No 4.69:
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
24,000 |
|
|
To Shyam’s Capital A/c |
|
|
15,000 |
|
|
To Premium for Goodwill A/c |
|
|
9,000 |
|
|
(Shyam brought capital and his share of goodwill in cash) |
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
9,000 |
|
|
To Prabhu’s Capital A/c |
|
|
4,500 |
|
|
To Sat Kumar’s Capital A/c |
|
|
4,500 |
|
|
(Goodwill brought by Shyam distributed between Prabhu and Sat Kumar i.e. 1:1) |
|
|
|
|
|
|
|
|
|
|
|
Prabhu’s Capital A/c |
Dr. |
|
4,500 |
|
|
Sat Kumar’s Capital A/c |
Dr. |
|
4,500 |
|
|
To Cash A/c |
|
|
|
9,000 |
|
(Amount of Premium for Goodwill withdrawn by Prabhu and Sat Kumar’s) |
|
|
|
|
|
|
|
|
|
|
Calculation of Future (New) Profit Sharing Ratio
Shyam admitted for share of profit
Let combined share of all partners after Shyam’s admission = 1
Combined share Phrabhu and Sat Kumar after Shyam’s admission
Page No 4.69:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c (60% of 25,000) |
Dr.
|
15,000
|
||||
To Premium for Goodwill A/c |
15,000
|
|||||
(Goodwill brought in by the new partner) | ||||||
Premium for Goodwill A/c |
Dr.
|
15,000
|
||||
To A’s Capital A/c |
10,000
|
|||||
To B’s Capital A/c |
5,000
|
|||||
(Goodwill distributed in among old partners in their sacrificing ratio) | ||||||
C’s Current A/c (40% of 25,000) |
Dr.
|
10,000
|
||||
To A’s Capital A/c |
6,667
|
|||||
To B’s Capital A/c |
3,333
|
|||||
(Amount of goodwill not brought by new partner debited from current account and distributed among old partners in their sacrificing ratio) |
Working Notes
Old ratio = 3 : 2
Page No 4.69:
Answer:
Journal | |||||
Date | Particulars | L.F. | Debit Amount Rs |
Credit Amount Rs |
|
Cash A/c | Dr. | 10,000 | |||
To Premium for Goodwill A/c | 10,000 | ||||
(C brought premium for Goodwill) | |||||
Premium for Goodwill A/c | Dr. | 10,000 | |||
To A’s Capital A/c | 6,667 | ||||
To B’s Capital A/c | 3,333 | ||||
(Premium for Goodwill distributed in sacrificing Ratio) | |||||
C’s Current A/c | Dr. | 6,000 | |||
To A’s Capital | 4,000 | ||||
To B’s Capital | 2,000 | ||||
(Out of the share of goodwill Rs 6,000 not brought by C, and charged from his capital account and distributed) | |||||
Working Notes:
WN1

WN2
Distribution of Premium for Goodwill

WN3
Distribution of Goodwill charged from C’s Capital Account

Page No 4.70:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit
Amount Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
80,000
|
||||
To C’s Capital A/c |
80,000
|
|||||
(Capital brought in by new partner) | ||||||
C’s Current A/c |
Dr.
|
7,500
|
||||
To A’s Capital A/c |
3,750
|
|||||
To B’s Capital A/c |
3,750
|
|||||
(Amount of goodwill not brought by new partner debited from his current account and distributed among old partners in their sacrificing ratio) | ||||||
Working Notes
Old ratio = 5 : 3
New ratio = 9 : 5 : 2
Page No 4.70:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
3,30,000
|
||||
To D’s Capital A/c
|
1,20,000
|
|||||
To E’s Capital A/c
|
1,20,000
|
|||||
To Premium for Goodwill A/c
|
90,000
|
|||||
(Capital and goodwill brought in by the new partners)
|
||||||
E’s Current A/c |
Dr.
|
45,000
|
||||
C’s Capital A/c |
Dr.
|
36,000
|
||||
Premium for Goodwill A/c |
Dr.
|
90,000
|
||||
To A’s Capital A/c |
1,35,000
|
|||||
To B’s Capital A/c
|
36,000
|
|||||
(Amount of goodwill not brought by new partners debited from their capital account and distributed among old partners in their sacrificing ratio) | ||||||
Working Notes
Old ratio = 5 : 4 : 1
New ratio = 3 : 4 : 2 : 2 : 1
Sacrificing ratio = Old ratio – New ratio
Sacrificing ratio = 15 : 4
Page No 4.70:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
80,000
|
||||
To Z’s Capital A/c
|
80,000
|
|||||
(Capital brought in by new partner) | ||||||
Z’s Current A/c |
Dr.
|
20,000
|
||||
To X’s Capital A/c |
10,000
|
|||||
To Y’s Capital A/c
|
10,000
|
|||||
(Amount of goodwill not brought by new partner debited from his capital account and distributed among old partners in their sacrificing ratio) | ||||||
Since, nothing has been specified about the new profit sharing ratio, thus, it has been assumed that sacrificing ratio is same as old ratio, i.e. 1 : 1.
Working Notes
Page No 4.70:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit
Amount Rs
|
Credit
Amount Rs
|
||
C’s Current A/c |
Dr.
|
10,000
|
||||
To A’s Capital A/c |
6,000
|
|||||
To B’s Capital A/c
|
4,000
|
|||||
(Amount of goodwill not brought by new partner debited from his capital account and distributed among old partners in their sacrificing ratio.) |
Since, nothing has been specified about new profit sharing ratio, it is assumed that sacrificing ratio is same as the old ratio.
Working Notes
Page No 4.70:
Answer:
Total Capital of the firm after Z’s admission = X’s Capital + Y’s Capital + Undistributed Profit + Z’s Capital
Total Capital of the firm after Z’s admission = 50,000 + 50,000 + 40,000 + 80,000
Total Capital of the firm after Z’s admission = Rs 2,20,000
Share of Goodwill of Z: Rs 25,000
Z’s Current A/c | Dr. | 25,000 | |
To X’s Capital A/c | 12,500 | ||
To Y’s Capital A/c | 12,500 | ||
Page No 4.70:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Cash A/c |
Dr.
|
50,000
|
||||
To Premium for Goodwill A/c |
50,000
|
|||||
(Goodwill amount brought in by new partner) | ||||||
Premium for Goodwill A/c |
Dr.
|
50,000
|
||||
C’s Current A/c |
Dr.
|
40,000
|
||||
To A’s Capital A/c
|
45,000
|
|||||
To B’s Capital A/c
|
45,000
|
|||||
(Amount of goodwill not brought by new partner debited from his capital account and distributed among old partners in their sacrificing ratio) | ||||||
A’s Capital A/c |
Dr.
|
80,000
|
||||
B’s Capital A/c |
Dr.
|
80,000
|
||||
To Goodwill A/c
|
1,60,000
|
|||||
(Goodwill written-off between old partners) | ||||||
Note: Since no information about new ratio is given, it is assumed that old partners will sacrifice in their old ratio.
Page No 4.70:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
39,600
|
||||
To C’s Capital A/c |
30,000
|
|||||
To Premium for Goodwill A/c |
9,600
|
|||||
(Capital and goodwill brought in by the new partner) | ||||||
Premium for Goodwill A/c |
Dr.
|
9,600
|
||||
To A’s Capital A/c |
7,200
|
|||||
To B’s Capital A/c
|
2,400
|
|||||
(Goodwill distributed among old partners in their sacrificing ratio) | ||||||
A’s Capital A/c |
Dr.
|
3,000
|
||||
B’s Capital A/c |
Dr.
|
1,000
|
||||
To Goodwill A/c
|
4,000
|
|||||
(Goodwill written off between old partners) |
Working Notes
WN 1: Calculation of Sacrificing Ratio
WN 2: Calculation of Goodwill
Total Profit = 15,000 + 12,000 + 18,000 + 19,000 = 64,000
Goodwill = Average profit for 4 years × Numbers of Years’ purchase
Goodwill = 16,000 × 3 = 48,000
Page No 4.70:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
50,000
|
||||
To W’s Capital A/c |
50,000
|
|||||
(Capital amount brought in by new partner)
|
||||||
W’s Current A/c |
Dr.
|
15,000
|
||||
To X’s Capital A/c |
2,500
|
|||||
To Y’s Capital A/c
|
5,000
|
|||||
To Z’s Capital A/c
|
7,500
|
|||||
(Amount of goodwill not brought by new partner debited from his capital account and distributed in old partners in their sacrificing ratio.) | ||||||
X’s Capital A/c |
Dr.
|
10,000
|
||||
Y’s Capital A/c |
Dr.
|
20,000
|
||||
Z’s Capital A/c |
Dr.
|
30,000
|
||||
To Goodwill A/c
|
60,000
|
|||||
(Old goodwill written off among old partners in their old ratio) |
Working Notes
Goodwill = Average profit for 3 years
Total Profit = 62,500 + 70,000 + 92,500 = 2,25,000
Goodwill = Rs 75,000
Note: As no information about new profit sharing ratio is given, it is assumed that old ratio is the sacrificing ratio. Since Z is not bringing any goodwill, his Current A/c will be debited.
Page No 4.71:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
5,15,200
|
||||
To B’s Capital A/c |
4,81,600
|
|||||
To Premium for Goodwill A/c |
33,600
|
|||||
(Capital and goodwill brought in by new partner) | ||||||
Premium for Goodwill A/c |
Dr.
|
33,600
|
||||
To A’s Capital A/c |
33,600
|
|||||
(Goodwill given to A brought in by B) |
Working Notes
Goodwill = Average Profit for 5 Years’ × Numbers of Years’ Purchase
Total Profit = (8,000) + 20,800 + 27,200 + 32,000 + 40,000 = 1,12,000
Calculation of A’s Capital
= Opening Balance of his Capital + 5 Years’ Profit+ A’s Share of Goodwill – Drawings
= 4,00,000 + 1,12,000 + 33,600 – 64,000= 4,81,600
Page No 4.71:
Answer:
(i)
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit
Amount Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
20,000
|
||||
To Premium for Goodwill A/c |
20,000
|
|||||
(Goodwill brought in by new partner in cash) | ||||||
Premium for Goodwill A/c |
Dr.
|
20,000
|
||||
To A’s Capital A/c |
18,000
|
|||||
To B’s Capital A/c |
2,000
|
|||||
(Goodwill distributed among old partners in their sacrificing ratio) | ||||||
A’s Capital A/c | Dr. |
24,000
|
||||
B’s Capital A/c | Dr. |
16,000
|
||||
To Goodwill A/c |
40,000
|
|||||
(Old Goodwill written off among old partners in their old ratio) |
Working Notes
Old ratio = 3 : 2
New ratio = 3 : 3 : 2
Sacrificing ratio = Old ratio – New ratio
Sacrificing ratio = 9 : 1
(ii)
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
1,000
|
||||
To Premium for Goodwill A/c |
1,000
|
|||||
(Goodwill brought in by new partner in cash) | ||||||
Premium for Goodwill A/c |
Dr.
|
1,000
|
||||
C’s Current A/c |
Dr.
|
1,000
|
||||
To A’s Capital A/c |
1,000
|
|||||
To B’s Capital A/c |
1,000
|
|||||
(Goodwill distributed among old partners in their sacrificing ratio) | ||||||
A’s Capital A/c | Dr. |
3,000
|
||||
B’s Capital A/c | Dr. |
3,000
|
||||
To Goodwill A/c |
6,000
|
|||||
(Old Goodwill written off among old partners in their old ratio) |
Page No 4.71:
Answer:
WN1: Calculation of Rao’s share of Goodwill
WN2: Adjustment of Rao’s share of Goodwill
(a) Where there is no Goodwill Account
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
Rao’s Capital A/c |
Dr. |
|
7,500 |
|
|
To Murty’s Capital A/c |
|
|
4,500 |
|
|
To Shah’s Capital A/c |
|
|
3,000 |
|
|
(Rao’s share of goodwill charged from his capital account and distributed between Murty and Shah in sacrificing ratio i.e., 3:2) |
|
|
|
|
|
|
|
|
|
(b) Goodwill appears at Rs 10,000
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
Murty’s Capital A/c |
Dr. |
|
6,000 |
|
|
Shah’s Capital A/c |
Dr. |
|
4,000 |
|
|
To Goodwill A/c |
|
|
10,000 |
|
|
(Goodwill written-off at the time of Rao’s admission in old ratio) |
|
|
|
|
|
|
|
|
|
|
|
Rao’s Capital A/c |
Dr. |
|
7,500 |
|
|
To Murty’s Capital A/c |
|
|
4,500 |
|
|
To Shah’s Capital A/c |
|
|
3,000 |
|
|
(Rao’s share of goodwill charged from his Capital Account and distributed between Murty and Shah in sacrificing ratio i.e., 3:2) |
|
|
|
|
|
|
|
|
|
Page No 4.71:
Answer:
|
Books of ….
|
|||||
|
Journal
|
|||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Revaluation A/c |
Dr.
|
16,000
|
||||
To Machinery A/c
|
16,000
|
|||||
(Machinery value has reduced) | ||||||
Building A/c |
Dr.
|
40,000
|
||||
To Revaluation A/c
|
40,000
|
|||||
(Building account appreciated) | ||||||
Revaluation A/c |
Dr.
|
4,000
|
||||
To Provision for Doubtful Debts A/c
|
4,000
|
|||||
(Provision created against debtors) | ||||||
Revaluation A/c | Dr. |
12,000
|
||||
To Provision for Warranty Claims A/c
|
12,000
|
|||||
(Created provision against warranty claims) | ||||||
Page No 4.71:
Answer:
|
Books of ….
|
|||||
|
Journal
|
|||||
Date
|
Particulars
|
L.F.
|
Debit Amount
Rs
|
Credit Amount
Rs
|
||
Investments A/c |
Dr.
|
20,000
|
||||
To Revaluation A/c
|
20,000
|
|||||
(Investment value increased due to unrecorded investment) | ||||||
Revaluation A/c |
Dr.
|
5,000
|
||||
To Creditors A/c
|
5,000
|
|||||
(Creditors increased by 5,000 due to unrecorded liability) | ||||||
Sundry Creditors A/c |
Dr.
|
1,600
|
||||
To Revaluation A/c
|
1,600
|
|||||
(Liability for creditors reduced to the extent of 1,600) | ||||||
Page No 4.71:
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
General Reserve A/c |
Dr. |
|
4,000 |
|
|
Revaluation A/c |
Dr. |
|
2,000 |
|
|
To A’S Capital A/c |
|
|
4,500 |
|
|
To B’s Capital A/c |
|
|
1,500 |
|
|
(Profit on Revaluation and General Reserve distributed between A and B in old ratio) |
|
|
|
|
|
|
|
|
|
Working Note:
Page No 4.72:
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
Creditors A/c |
Dr. |
|
5,000 |
|
|
Building A/c |
Dr. |
|
40,000 |
|
|
Investments A/c |
Dr. |
|
15,000 |
|
|
To Revaluation A/c |
|
|
60,000 |
|
|
(Increase in assets and decrease in liabilities transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
10,000 |
|
|
To Provision for Doubtful Debts A/c |
|
|
5,000 |
|
|
To Reserve for outstanding Repairs Bill A/c |
|
|
2,000 |
|
|
To Creditors A/c |
|
|
3,000 |
|
|
(Increase in liabilities and creation of reserves and provisions transferred to Revaluation Account) |
|
|
|
|
|
|
|
|
|
|
|
Revaluation A/c |
Dr. |
|
50,000 |
|
|
To Old Partners’ Capital A/c |
|
|
50,000 |
|
|
(Profit on Revaluation transferred to Partners’ Capital) |
|
|
|
|
|
|
|
|
|
Page No 4.72:
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
Profit and Loss Adjustment A/c |
Dr. |
|
1,750 |
|
|
To Stock A/c |
|
|
500 |
|
|
To Plant and Machinery A/c |
|
|
875 |
|
|
To Reserve for Doubtful Debts A/c |
|
|
375 |
|
|
(Decrease in stock and Plant and creation of Reserve for Doubtful Debt transferred to Profit and Loss Adjustment Account) |
|
|
|
|
|
|
|
|
|
|
|
Building A/c |
Dr. |
|
2,500 |
|
|
To Profit and Loss Adjustment A/c |
|
|
2,500 |
|
|
(Increase in value of Building of transferred to Profit and loss Adjustment Accounts) |
|
|
|
|
|
|
|
|
|
|
|
Profit and Loss Adjustment A/c |
|
750 |
|
|
|
To A’s Capital A/c |
|
|
500 |
|
|
To B’s Capital A/c |
|
|
250 |
|
|
(Profit on revaluation of asset and liabilities distributed between A and B in their old ratio) |
|
|
|
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
10,500 |
|
|
To C’s Capital A/c |
|
|
7,500 |
|
|
To Premium for Goodwill A/c |
|
|
3,000 |
|
|
(C brought capital and share of goodwill) |
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
3,000 |
|
|
To A’s Capital A/c |
|
|
2,000 |
|
|
To B’s Capital A/c |
|
|
1,000 |
|
|
(Premium for Goodwill distributed between A and B in their sacrificing ratio i.e 2:1) |
|
|
|
|
|
|
|
|
|
Profit and Loss Adjustment Account |
|||
Dr. |
|
Cr. |
|
Particulars |
Amount Rs |
Particulars |
Amount Rs |
Stock |
500 |
|
|
Plant and Machinery |
875 |
Building |
2,500 |
Reserve for Doubtful Debts |
375 |
|
|
Profit transferred to |
|
|
|
A Capital |
500 |
|
|
B Capital |
250 |
|
|
|
2,500 |
|
2,500 |
|
|
|
|
Partners’ Capital Accounts |
|||||||
Dr. |
|
Cr. |
|||||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
|
|
|
Balance b/d |
15,000 |
10,000 |
|
|
|
|
|
Cash |
|
|
7,500 |
|
|
|
|
Premium for Goodwill |
2,000 |
1,000 |
|
Balance c/d |
17,500 |
11,250 |
7,500 |
Profit and Loss Adjustment (Profit) |
500 |
250 |
|
|
17,500 |
11,250 |
7,500 |
|
17,500 |
11,250 |
7,500 |
|
|
|
|
|
|
|
|
Balance Sheet as on March 31, 2016 after admission of C |
|||||
Liabilities |
Amount Rs |
Assets |
Amounts Rs |
||
|
|
|
|
||
Capital Accounts: |
|
Building (25,000 + 2,500) |
27,500 |
||
A |
17,500 |
|
Plant and Machinery (17,500 – 875) |
16,625 |
|
B |
11,250 |
|
Stock (10,000 – 500) |
9,500 |
|
C |
7,500 |
36,250 |
|
|
|
Sundry Creditors |
32,950 |
Sundry Debtors |
4,850 |
|
|
|
|
Less: Provision for D. Debts |
375 |
4,475 |
|
|
|
Cash in Hand (600 + 10,500) |
11,100 |
||
|
69,200 |
|
69,200 |
||
|
|
|
|
Working Notes:
WN1
WN2
Distribution of Premium for Goodwill (in sacrificing ratio)
WN3
Distribution of Profit from Profit and loss Adjustment Account (in old ratio)
Page No 4.72:
Answer:
Books of ….
|
||||||
Journal
|
||||||
Date
|
Particulars
|
L.F.
|
Debit
Amount Rs
|
Credit Amount
Rs
|
||
Bank A/c |
Dr.
|
2,50,000
|
||||
To C’s Capital A/c |
2,00,000
|
|||||
To Premium for Goodwill A/c |
50,000
|
|||||
(Capital and Goodwill brought in by new partner) | ||||||
Premium for Goodwill A/c |
Dr.
|
50,000
|
||||
To A’s Capital A/c |
25,000
|
|||||
To B’s Capital A/c |
25,000
|
|||||
(Goodwill distributed among old partners in their sacrificing ratio, i.e. 1 : 1) | ||||||
A’s Capital A/c | Dr. |
25,000
|
||||
B’s Capital A/c | Dr. |
25,000
|
||||
To Cash A/c |
50,000
|
|||||
(Goodwill brought in by C is withdrawn by old partners) | ||||||
Revaluation A/c (10,000 – 5,000) | Dr. |
5,000
|
||||
To Provision for Doubtful Debts |
5,000
|
|||||
(Created provision against debtors) | ||||||
Revaluation A/c | Dr. |
32,500
|
||||
To Machinery A/c |
20,000
|
|||||
To Furniture A/c |
12,500
|
|||||
(Value of machinery and furniture has depreciated) | ||||||
Stock A/c | Dr. |
30,000
|
||||
To Revaluation A/c |
30,000
|
|||||
(Value of stock has reduced) | ||||||
Building A/c | Dr. |
1,47,000
|
||||
To Revaluation A/c |
1,47,000
|
|||||
(Value of building has appreciated by 20%) | ||||||
Investments A/c | Dr. |
20,000
|
||||
To Revaluation A/c |
20,000
|
|||||
(Value of investments has increased due to unrecorded investments) | ||||||
Revaluation A/c | Dr. |
1,59,500
|
||||
To A’s Capital A/c |
79,750
|
|||||
To B’s Capital A/c |
79,750
|
|||||
(Revaluation profit distributed among old partners in their old ratio) |
Balance Sheet
as on March 31, 2016 after C’s admission
|
|||||
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
||
Sundry Creditors |
6,50,000
|
Sundry Debtors |
2,00,000
|
||
Outstanding Expenses |
30,000
|
Less: Provision for Doubtful debts |
10,000
|
1,90,000
|
|
Capital A/c: | Stock |
2,30,000
|
|||
A | 6,79,750 | Furniture (1,00,000 – 12,500) |
87,500
|
||
B |
4,79,750
|
Investments |
20,000
|
||
C |
2,00,000
|
13,59,500
|
Machinery (1,80,000 – 20,000) |
1,60,000
|
|
Building (7,35,000 + 1,47,000) |
8,82,000
|
||||
Cash at Bank |
4,70,000
|
||||
20,39,500
|
20,39,500
|
||||
Working Notes
Partners’ Capital Accounts
|
|||||||||
Dr. |
Cr.
|
||||||||
Particulars
|
A
|
B
|
C
|
Particulars
|
A
|
B
|
C
|
||
Bank A/c |
25,000
|
25,000
|
Balance b/d |
6,00,000
|
4,00,000
|
||||
Bank A/c |
2,00,000
|
||||||||
Revaluation A/c |
79,750
|
79,750
|
|||||||
Balance c/d |
6,79,750
|
4,79,750
|
2,00,000
|
Premium for Goodwill A/c |
25,000
|
25,000
|
|||
7,04,750
|
5,04,750
|
2,00,000
|
7,04,750
|
5,04,750
|
2,00,000
|
||||
Cash at Bank Account
|
|||||
Dr. |
Cr.
|
||||
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
||
Balance b/d |
2,70,000
|
A’s Capital A/c |
25,000
|
||
C’s Capital A/c |
2,00,000
|
B’s Capital A/c |
25,000
|
||
Premium for Goodwill A/c |
50,000
|
Balance c/d |
4,70,000
|
||
5,20,000
|
5,20,000
|
||||
Page No 4.73:
Answer:
Revaluation Account
|
||||||
Dr. |
Cr.
|
|||||
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
|||
Stock A/c |
6,250
|
Provision for Doubtful Debts A/c |
18,750
|
|||
Plant and Machinery A/c |
21,250
|
Loss transferred to: | ||||
X’s Capital A/c | 5,250 | |||||
Y’s Capital A/c | 3,500 |
8,750
|
||||
27,500
|
27,500
|
|||||
Cash at Bank Account
|
|||||
Dr. |
Cr.
|
||||
Particulars
|
Amount
Rs
|
Particulars
|
Amount
Rs
|
||
Balance b/d |
1,50,000
|
Balance c/d |
4,89,250
|
||
Premium for Goodwill A/c |
89,250
|
||||
Samir’s Capital A/c |
2,50,000
|
||||
4,89,250
|
4,89,250
|
||||
Partners’ Capital Accounts
|
|||||||||
Dr. |
Cr.
|
||||||||
Particulars
|
X
|
Y
|
Z
|
Particulars
|
X
|
Y
|
Z
|
||
Revaluation A/c |
5,250
|
3,500
|
Balance b/d |
3,75,000
|
1,87,500
|
||||
Bank A/c |
2,50,000
|
||||||||
Balance c/d |
4,14,375
|
2,28,625
|
2,50,000
|
Premium for Goodwill A/c |
44,625
|
44,625
|
|||
4,19,625
|
2,32,125
|
2,50,000
|
4,19,625
|
2,32,125
|
2,50,000
|
||||
Balance Sheet
as on April 01, 2016 after Z’s admission
|
|||||
Liabilities
|
Amount
Rs
|
Assets
|
Amount
Rs
|
||
Sundry Creditors |
1,87,500
|
Debtors |
2,50,000
|
||
Bills Payable |
1,00,000
|
Less: Provision for Doubtful Debts |
6,250
|
2,43,750
|
|
Outstanding Rent |
25,000
|
Stock (62,500 – 6,250) |
56,250
|
||
Capital A/cs: | Plant and Machinery (4,25,000 – 21,250) |
4,03,750
|
|||
X |
4,14,375
|
Prepaid Expenses |
12,500
|
||
Y |
2,28,625
|
Cash at Bank |
4,89,250
|
||
Z |
2,50,000
|
8,93,000
|
|||
12,05,500
|
12,05,500
|
||||
Working Notes
WN 1:Calculation of Sacrificing Ratio
WN 2:Calculation of Hidden Goodwill
Page No 4.73:
Answer:
Journal |
|||||
Date |
Particulars |
L.F. |
Debit Amount Rs |
Credit Amount Rs |
|
|
|
|
|
|
|
|
Cash A/c |
Dr. |
|
20,880 |
|
|
To C’s Capital A/c |
|
|
15,000 |
|
|
To Premium for Goodwill A/c |
|
|
5,880 |
|
|
(C brought capital and share of goodwill) |
|
|
|
|
|
|
|
|
|
|
|
Premium for Goodwill A/c |
Dr. |
|
5,880 |
|
|
To A’s Capital A/c |
|
|
3,528 |
|
|
To B’s Capital A/c |
|
|
2,352 |
|
|
(Premium for Goodwill distributed between A and B in sacrificing ratio i.e. 3:1) |
|
|
|
|
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
|
|
|
Cr. |
|||
Particulars |
A |
B |
C |
Particulars |
A |
B |
C |
|
|
|
|
Balance b/d |
51,450 |
36,750 |
|
|
|
|
|
Cash |
|
|
15,000 |
Balance c/d |
54,978 |
39,102 |
15,000 |
Premium for Goodwill |
3,528 |
2,352 |
|
|
54,978 |
39,102 |
15,000 |
|
54,978 |
39,102 |
15,000 |
|
|
|
|
|
|
|
|
Balance Sheet after Admission of C |
||||
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
|
|
|
|
|
Capital: |
|
Cash (1,500 + 20,880) |
22,380 |
|
A |
54,978 |
|
Stock |
28,000 |
B |
39,102 |
|
Debtors |
19,500 |
C |
15,000 |
1,09,080 |
Furniture |
2,500 |
Creditors |
|
11,800 |
Machinery |
48,500 |
|
|
1,20,880 |
|
1,20,880 |
|
|
|
|
|
Calculation of New Profit Sharing Ratio
C is admitted for share of profit
Let combined share of all partners after admission of C be = 1
Combined share of A and B after C’s admission = 1 − C’s share
Working Note-
WN1
WN2
Page No 4.74:
Answer:
Profit and Loss Adjustment Account |
||||
Dr. |
|
Cr. |
||
Particulars |
Amount Rs |
Particulars |
Amount Rs |
|
|
|
|
|
|
Stock |
1,800 |
Building |
15,000 |
|
Furniture |
440 |
|
|
|
Provision for Doubtful Debts |
275 |
|
|
|
Profit transferred to |
|
|
|
|
Shyamlal Capital |
4,994 |
|
||
Sanjay Capital |
7,491 |
12,485 |
||
|
|
15,000 |
|
15,000 |
|
|
|
|
|
Partners’ Capital Account |
|||||||
Dr. |
|
|
Cr. |
||||
Particulars |
Shyamlal |
Sanjay |
Shanker |
Particulars |
Shyamlal |
Sanjay |
Shanker |
|
|
|
|
Balance b/d |
34,050 |
34,050 |
|
|
|
|
|
Cash A/c |
|
|
30,000 |
|
|
|
|
Premium for Goodwill |
8,000 |
12,000 |
|
Balance c/d |