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Question
Pankaj and Naresh were partners in a firm sharing profits in the ratio of 3 : 2. Their fixed capitals were Rs 5,00,000 and Rs 3,00,000 respectively. On 1.1.2017, Saurabh was admitted as a new partner for `1/5th` share in the profits. Saurabh acquired his share of profit from Pankaj. Saurabh brought Rs 3,00,000 as his capital which was to be kept fixed like the capitals of Pankaj and Naresh.
Calculate the goodwill of the firm on Saurabh's admission and the new profit sharing ratio of Pankaj, Naresh and Saurabh. Also, pass necessary journal entry for the treatment of goodwill.
Solution
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Journal |
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Date |
Particulars |
L.F. |
Debit Amount (Rs) |
Credit Amount (Rs) |
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Cash A/c |
Dr. |
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3,00,000 |
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To Saurabh’s Capital A/c |
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3,00,000 |
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(Capital brought in cash) |
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Saurabh’s Current A/c |
Dr. |
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80,000 |
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To Pankaj’s Current A/c |
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80,000 |
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(Goodwill adjusted through current accounts) |
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Notes
Calculation of Saurabh's Share of Goodwill (Hidden)
Total capital of the firm= Rs`15,000 (3,00,000xx5/1)`
Net worth =Rs `11,00,000 (5,00,000+3,00,000+3,00,000)`
Hidden goodwill=Rs `4,00,000 (15,00,000-11,00,000) `
Saurabh's Share of Goodwill =`4,00,000xx1/5=Rs80,000`
Calculation of New Profit Sharing Ratio:
Pankaj's share =`3/5-1/5=2/5`
Naresh=`2/5` (same as old)
Saurabh=`1/5`
New Ratio=`2:2:1`
APPEARS IN
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1,80,000
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Balance Sheet of S, T, U and V as on 1.4.2016 |
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Liabilities |
Amount (Rs) |
Assets |
Amount (Rs) |
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Capitals: |
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Fixed Assets |
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S |
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Current Assets |
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T |
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U |
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V |
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| Sundry Creditor | 80,000 | |||
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Workmen |
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Compensation Reserve |
60,000 |
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6,40,000 |
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Balance Sheet of W and R as on 31.3.2016 |
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Sundry Creditors |
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Provision for Bad Debts |
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20,000 |
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General Reserve |
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Plant & Machinery |
40,000 |
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Capitals: |
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W |
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R |
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1,30,000 |
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Balance Sheet of 'G', 'E' and 'F' as on 31st March, 2011 |
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|
Liabilities |
Amount Rs |
Assets |
Amount Rs |
|
|
Capitals: |
|
Goodwill |
40,000 |
|
|
‘G’ |
70,000 |
|
Land & Buildings |
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‘E’ |
20,000 |
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40,000 |
|
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1,00,000 |
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|
General Reserve |
20,000 |
Debtors |
12,000 |
|
|
Loan from ‘E’ |
30,000 |
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5,000 |
|
|
Creditors |
14,000 |
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1,64,000 |
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1,64,000 |
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Balance Sheet of Sanjay and Sameer as on 31.3.2011 |
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Liabilities |
Amount Rs |
Assets |
Amount Rs |
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Capitals |
|
Land and Building |
3,00,000 |
|
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Sanjay: |
2,00,000 |
|
Stock |
1,00,000 |
|
Sameer: |
3,00,000 |
5,00,000 |
Debtors |
1,50,000 |
|
Creditors |
1,05,000 |
Bank |
1,55,000 |
|
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Workmen compensation Fund |
1,00,000 |
|
|
|
|
|
7,05,000 |
|
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