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4.28 Double Entry Book Keeping (Section A)—ISC XII

Working Notes:
1. Gain/Sacrifice = New Share – Old Share
2 3 1 3 2 4
Sonu’s Gain = − = ; Zubin’s Gain = − =
5 10 10 5 10 10
Gaining Ratio = 1 : 4.
5
2. Hari’s Share of Goodwill = ` 80,000 × = ` 40,000 to be contributed by Sonu and Zubin in their gaining ratio.
10
3. Total Capital of the New Firm = Adjusted Capital of All Partners – Cash Available for Payment
Hari’s Adjusted Capital = ` 40,000 + ` 5,000 + ` 8,000 + ` 32,000 + ` 42,500 – ` 2,750 – ` 2,500 – ` 2,500
= ` 1,19,750.
Sonu’s Adjusted Capital = ` 62,000 + ` 3,000 + ` 25,500 – ` 1,650 – ` 1,500 – ` 1,500 – ` 8,000
= ` 77,850.
Zubin’s Adjusted Capital = ` 33,000 + ` 2,000 + ` 17,000 – ` 1,100 – ` 32,000 – ` 1,000 – ` 1,000
= ` 16,900.
Cash Available for Payment = ` 40,000 – ` 8,000 – ` 15,000 = ` 17,000
Total Capital of New Firm = ` 1,19,750 + ` 77,850 + ` 16,900 – ` 17,000 = ` 1,97,500
2
Sonu’s New Capital = ` 1,97,500 × = ` 79,000
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3
Zubin’s New Capital = ` 1,97,500 × = ` 1,18,500.
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4. Dr. BANK ACCOUNT Cr.
Particulars ` Particulars `
To Balance b/d 40,000 By Creditors’ A/c 8,000
To Sonu’s Capital A/c 1,150 By Hari’s Capital A/c 1,19,750
To Zubin’s Capital A/c 1,01,600 By Balance c/d 15,000
1,42,750 1,42,750

Illustration 17.
Micky, Ricky and Vicky were partners sharing profits and losses in the ratio of 5 : 3 : 2. On
31st March, 2019 their Balance Sheet was as follows:
Liabilities ` Assets `

Sundry Creditors 55,000 Goodwill 25,000
Investment Fluctuation Reserve 17,500 Patents 1,30,000
Workmen Compensation Reserve 17,500 Machinery 1,56,000
Capital A/cs: Investments 15,000
Micky 3,37,500 Stock 50,000
Ricky 2,37,500 Sundry Debtors 62,000
Vicky 1,85,000 7,60,000 Less: Provision for Doubtful Debts 2,000 60,000
Loan to Vicky 5,000
Cash at Bank 29,000
Advertisement Expenditure 5,000
Profit and Loss A/c (2018–19) 3,75,000
8,50,000 8,50,000