Class 12 Accountancy Vol 1 Chapter 5 - Admission of a Partner

Ts Grewal Solutions for Class 12 Accountancy Vol 1 Chapter 5

TS Grewal Solutions for Class 12 Accountancy Chapter 5 – Admission of a partner is considered to be an essential concept to be learnt completely by the students. Here, we have provided TS Grewal Accountancy solutions for class 12 in a simple and a step by step manner, which is helpful for the students to score well in their upcoming board examinations.

Board

CBSE

Class

Class 12

Subject

Accountancy

Chapter

Chapter 5

Chapter Name

Admission of a partner

Number of questions solved

06

Category

TS Grewal

Chapter 5 – Admission of a partner explains the below-mentioned concepts:

  • Revaluation account, cash account and balance sheet
  • Calculation of ratios
  • Adjustment of Capital
  • Goodwill: Valuation and Treatment

TS Grewal Solutions for Class 12 Accountancy Chapter 5 – Admission of a partner

Question 1

X and Y are partners sharing profits in the ratio of 6:4. Z is admitted for 1/4th share in the profits. Compute the new profit sharing ratio of the partners.

Solution:

Calculation of New profit sharing ratio –

Old profit sharing ratio of X and Y = 6:4 or 6/10 : 4/10

Let the total share be = 1; Z’s share = 1/4

The remaining share of X and Y = 1-¼ = 3/4

Distribute the remaining share of 3/4 in the old profit sharing ratio of 6:4 between X and Y.

X’s new share = 3/4 X 6/10 = 18/40

Y’s new share = 3/4 X 4/10 = 12/40

Z’s new share = 1/4 or 10/40

Hence, New profit sharing ratio of X, Y and Z = 18/40:12/40:10/40

= 18:12:10

Question 2

Mahesh and Harish are partners sharing profits in the ratio of 3:2. They admit Suresh into the partnership for 25% of the share of profit. Suresh acquired the share from the old partners in the ratio of 4:3. Calculate the new profit sharing ratio.

Solution:

Suresh acquires 25% i.e. 1/4th share in the profit from Mahesh and Harish in the ratio of 4:3m it is,

Suresh gets from Mahesh = 4/7 of 1/4 = 4/28

From Harish = 3/7 of 1/4 = 3/28

Suresh’s share = 4/28 + 3/28 = 7/28

New share = Old share – Share surrendered

New share of Mahesh = 3 /5 -4/28 = 84-20/140 = 64/140

New share of Harish = 2/5 – 7/28 = 56-35 = 21/140

Share of Suresh = 1 /4 or 35/140

Thus, the new profit sharing ratio = 64/140:21/140:35/140

= 64:21:35

Question 3

A, B and C are partners sharing profits in the ratio of 2:2:1. D is admitted as a new partner doe 1/6th share. C will retain his share. Now, compute New Profit Sharing Ratio.

Solution:

Let the total share of the firm be = 1

Share of C and D = ⅕ + ⅙ = 6+5/30 = 11/30

Remaining share = 1 – 11/30 = 19/30

New shares of A and B are computed by dividing the remaining share in their profit sharing ratio, i.e., 2:2 or 1:1 as under:

A’s new share = 19/30 X ½ = 19/60

B’s new share = 19/30 X ½ = 19/60

Hence, New Profit Sharing Ratio of A, B, C and D = 19/60:19/60:⅕:⅙

= 19:19:12:10

Question 4

V and W are partners sharing profits in the ratio of 5:3. X is admitted fo 3/10th share of profits out of which half share was gifted by V and the remaining share was taken by X equally from V and W. Compute New Profit Sharing Ratio.

Solution:

V W
Their old share
Share gifted by V 3/10 X ½ = 3/20
Share acquired by X 3/20 X ½ = 3/40 3/20 X ½ = 3/40

New share of V = Old share – Share gifted – Share acquired by X

= ⅝ – 3/20 – 3/40 = 25-6-3 divided by 40 = 16/40

New share of W = ⅜ – 3/40 = 15-3 divided by 40 = 12/40

Hence, New Profit Sharing Ratio of V, W and X = 16/40:12/40:3/10

= 4:3:3

Question 5

P and Q are partners in the firm sharing profits in the ratio of 3:2. P and Q surrender ½ of their respective shares in the favour of R. R is to bring his share of premium for goodwill in cash. Goodwill of the firm is valued at ₹. 50,000/-.

Pass the necessary journal entries for recording goodwill in the above case.

Solution:

JOURNAL ENTRIES

Date

Particulars

L.F.

Dr. (₹)

Cr. (₹)

Cash or Bank a/c Dr.

To premium for goodwill a/c (WN 3)

(Being the share of premium brought in cash by R)

25,000

25,000

Premium for goodwill a/c Dr.

To P’s capital a/c

To Q’s capital a/c

(Being the distribution of premium among the sacrificing partners in their sacrificing ratio and i.e., 3:2 WN 1, 2 and 3)

25,000

15,000

10,000

Alternatively:

JOURNAL ENTRIES

Date

Particulars

L.F.

Dr. (₹)

Cr. (₹)

Cash or Bank a/c Dr.

To R’s capital a/c

(Being the amount brought by R for his share of goodwill)

25,000

25,000

R’s capital a/c Dr.

To P’s capital a/c

To Q’s capital a/c

(Being the distribution of premium among the sacrificing partners in their sacrificing ratio and i.e., 3:2 WN 1, 2 and 3)

25,000

15,000

10,000

Working Notes:

Working note 1 –

P’s sacrifice = 3/5 X 1/2 = 3/10

Q’s sacrifice = 2/5 X 1/2 = 2/10

Sacrificing ratio between P and Q = 3:2

Working note 2 –

R’s share = 3/10 + 2/10 + 5/10 or 1/2

Working note 3 –

Goodwill brought by R = 1/2 of 50,000 = 25,000

Question 6

C and D are partners in an enterprise sharing profits in the ratio of 4:3. On 1st April 2018, they admitted E as a partner. E brought in ₹. 2,00,000/- for his capital and ₹. 24,000/- for a 1/3rd share of goodwill premium. On E’s admission, goodwill appeared in the books of the enterprise @ ₹. 28,000/-. Pass the necessary journal entries on E’s admission.

Solution:

JOURNAL ENTRIES

Date

Particulars

L.F.

Dr. (₹)

Cr. (₹)

2018 April 1

C’s capital a/c Dr.

D’s capital a/c Dr.

To Goodwill a/c

(Being the existing goodwill written off prior to E’s admission)

16,000

12,000

28,000

2018 April 1

Bank a/c Dr.

To E’s capital a/c

To premium for goodwill a/c

(Being E brought in cash for his capital and his share of goodwill)

2,24,000

2,00,000

24,000

2018 April 1

Premium for goodwill a/c Dr.

To C’s capital a/c

To D’s capital a/c

(Being the goodwill or premium for goodwill brought in by E, transferred to the capital a/c of C and D in their sacrificing ratio of (4:3)

24,000

13,714

10,286

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