DK Goel Solutions for Class 12 Accountancy Vol 1 Chapter 3 Admission of a partner

DK Goel Accountancy Class 12 Solutions Chapter 3 Admission of a partner which is outlined by expert Accountancy teachers from the latest version of DK Goel Accountancy Class 12 textbook solutions. We at BYJU’S provide DK Goel Solutions to assist students to comprehend all the theories in particular. Learn more concepts in Accountancy, however, the concepts of Admission of a partner, Accounting Ratios and Cash Flow Statement (As per AS – 3 Revised) is required.

DK Goel Solutions Class 12 – Chapter 3 – Part A

Question 1

A and B are partners sharing profits in the ratio of 3:2. They admit C into the company for 1/4th share in profit which he takes 1/6th from A and 1/12th from B. However, C brings ₹50,000 as goodwill out of his share of ₹90,000. No goodwill account appears in the books of the company. Pass necessary journal entries to record this arrangement.

Solution:

Journal
Date Particulars L.F Dr. (₹) Cr. (₹)
Bank Account Dr. 50,000
To Premium for Goodwill A/c

(A part of his share of goodwill/premium brought in by C)

50,000
Premium for Goodwill A/c

C’s Current A/c

Dr.

Dr.

50,000

40,000

To A’s Capital A/c 60,000
To B’s Capital A/c

(Goodwill/premium credited to A and B in their sacrificing ratio, i.e, 2:1)

30,000

Question 2

A and B are partners sharing profits equally. They admit C into partnership, C paying only ₹60,000 for premium out of his share of a premium of ₹1,80,000 for a 1/4th share of profit. Goodwill account appears in the book at ₹3,00,000. Give the necessary journal entries.

Solution:

Journal Entry
Date Particulars L.F Dr. (₹) Cr. (₹)
A’s Capital A/c Dr. 1,50,000
B’s Capital A/c Dr. 1,50,000
To Goodwill A/c

(The existing goodwill is written off)

3,00,000
Bank A/c Dr. 60,000
To Premium for Goodwill A/c

(A part of his share of goodwill/premium brought in by C)

60,000
The premium for Goodwill A/c Dr. 60,000
C’s Current A/c Dr. 48,000
To A’s Capital A/c 54,000
To B’s Capital A/c

(The goodwill/premium credited to old partners in their sacrificing ratio i.e 1:1)

54,000

Question 3

X and Y are partners in a company. Their profit sharing ratio is 5:3. They admit Z into a partnership for 1/4th share. As between themselves, A and B decide to share profits equally in the future. C brings in ₹1,20,000 as his capital and ₹60,000 as premium. Calculate the sacrificing ratio and record the necessary journal entries on the assumption that the amount of premium brought in by C is retained in the business.

Solution:

Journal
Date Particulars L.F Dr. (₹) Cr. (₹)
Bank A/c Dr. 1,80,000
To Z’s Capital A/c 1,20,000
To Premium for Goodwill A/c

(The amount of goodwill/premium brought in cash)

60,000
The premium for Goodwill A/c Dr. 60,000
To X’s Capital A/c

(Full amount of goodwill /premium transferred to X’s Capital A/c, as he alone has sacrificed

60,000

Calculation of new profit sharing ratio: C takes a 1/4th share out of 1.

Thus, the remaining profit is 3/4; This is divided equally between A and B

X’s new share = 3/4 x 1/2 = 3/8

Y’s new share = 3/4 x 1/2 = 3/8

Sacrificed made by X = 5/8 – 3/8 =2/8

Sacrificed made by Y = 3/8 – 3/8 =0

Hence, X alone has sacrificed and as such he alone will be entitled to the full amount of goodwill premium brought in by Z.

Question 4

Balance Sheet of P and Q who share profits and losses in the ratio of 5:3 as at 31st March, 2018 was a follows.

Liabilities Assets
Capital Accounts: Land & Building 3,00,000
P

Q

Profit & Loss A/c

Workmen Compensation Reserve

Sundry Creditors

2,50,000

1,50,000

1,30,000

60,000

50,000

Machinery

Stock

Debtors

Cash

Advertisement Expenditure

(Deferred Revenue)

2,00,000

70,000

30,000

10,000

30,000

6,40,000 6,40,000

They admit R as a partner for 1/3 rd share in the profits of the firm which he acquires from P and Q in the ratio of 3:1. R brings in ₹4,00,000 as his capital. Ascertain the amount of goodwill and pass journal entries on the admission of R.

Solution:

Journal
Date Particulars L.F Dr. (₹) Cr. (₹)
2018

1st April

Profit and Loss A/c

Workmen Compensation Reserve A/c

Dr.

Dr.

1,30,000

60,000

To P’s Capital A/c

To Q’s Capital A/c

(Transfer of accumulated profits to old partners in their old profit sharing ratio)

1,18,750

71,250

P’s Capital A/c

Q’s Capital A/c

Dr.

Dr.

18,750

11,250

To Advertisement Expenditure A/c

(Transfer of accumulated loss to old partners in their old profit sharing ratio)

30,000
Bank A/c Dr. 4,00,000
To R’s Capital A/c

(Amount brought in by R as his capital)

4,00,000
R’s Current A/c Dr. 80,000
To P’s Capital A/c

To Q’s Capital A/c

(R’s share of goodwill credited to P and Q in their sacrificing ratio 3:1)

60,000

20,000

Working Note:

Calculation of hidden goodwill

Total of Capital of the new firm on the basis of R’s capital: ₹4,00,000 x 3/1 12,00,000
Less: Net worth of new firm:
Adjusted capital of P
(₹2,50,000 + ₹1,18,750 – ₹18,750) 3,50,000
Adjusted capital of Q
(₹1,50,000 + ₹71,250 – ₹11,250) 2,10,000
Capital of R 4,00,000 9,60,000
Value of the firm’s goodwill 2,40,000
R’s share of goodwill = ₹2,40,000 x 1/3 = ₹ 80,000

Stay tuned to BYJU’S for more DK Goel solutions, question papers, sample papers, syllabus and Commerce notifications.

 

1 Comment

Leave a Comment

Your email address will not be published. Required fields are marked *