I have provided Change in Profit Sharing Ratio TS Grewal Solutions 2024-25 in this article. If you have any doubt, you can ask them in the comment section.
Topics Discussed
Solution 1 (Om and Shyam)
Old Ratio between Om and Shyam = 1:1
New Ratio between Om and Shyam = 4:3
Gain/Sacrifice:
Om = -1/14 (Gain)
Shyam = 1/14 (Sacrifice)
Solution 2 (Ahilya, Laxmi, and Parvati)
Old Ratio between Ahilya, Laxmi, and Parvati = 5:3:2
New Ratio = 5:2:3
Gain/Sacrifice:
Ahilya = 0
Laxmi = 1/10 (Sacrifice)
Parvati = -1/10 (Gain)
Solution 3 (X, Y, and Z)
Old Ratio between X, Y, and Z = 5:3:2
New Ratio = 1:1:1
Gain/Sacrifice:
X = 1/6 (Sacrifice)
Y = -1/30 (Gain)
Z = -2/15 (Gain)
Solution 4 (A, B, and C)
Case 1
Calculation of New Profit Sharing Ratio:
A’s New Share = 5/10-1/5 = 3/10
C’s New Share = 1/10+1/5 = 3/10
Old Ratio between A, B, and C = 5:4:1
New Ratio = 3:4:3
Gain/Sacrifice:
A = 1/5 (Sacrifice)
B = 0
C = -1/5 (Gain)
Case 2
Calculation of New Profit Sharing Ratio:
C gets 1/5
C gets from A = 1/10
C gets from B = 1/10
A’s New Share = 5/10-1/10 =2/5
B’s New Share = 4/10-1/10 = 3/10
C’s New Share = 1/10+1/10+1/10 = 3/10
Old Ratio between A, B, and C = 5:4:1
New Ratio = 4:3:3
Gain/Sacrifice:
A = 1/10 (Sacrifice)
B = 1/10 (Sacrifice)
C = -1/5 (Gain)
Case 3
Old Ratio between A, B, and C = 5:4:1
New Ratio = 1:1:1
Gain/Sacrifice:
A = 1/6 (Sacrifice)
B = 1/15 (Sacrifice)
C = -7/30 (Gain)
Case 4
Calculation of New Profit Sharing Ratio:
C gets 1/5
C gets from A = 1/20
C gets from B = 1/5
A’s New Share = 9/20
B’s New Share = 1/5
C’s New Share = 7/20
Old Ratio between A, B, and C = 5:4:1
New Ratio = 9:4:7
Gain/Sacrifice:
A = 1/20 (Sacrifice)
B = 1/5 (Sacrifice)
C = -1/4 (Gain)
Solution 5 (Pranav, Karan, and Rahim)
New Ratio between Pranav, Karan, and Rahim = 3:3:4
Rahim takes from Pranav = 1/10
Rahim takes from Karan = 1/10
Pranav Old Share = 2/5
Karan’s Old Share = 2/5
Rahim’s Old Share = 1/5
Old Ratio between Pranav, Karan, and Rahim = 2:2:1
Solution 6 (Asha, Nisha, and Disha)
Value of Goodwill = Rs. 18,000
Old Ratio between Asha, Nisha, and Disha = 3:2:1
New Ratio = 1:1:1
Gain/Sacrifice:
Asha = 1/6 (Sacrifice)
Nisha = 0
Disha = -1/6 (Gain)
Asha’s Sacrifice = Rs. 3,000
Disha’s Sacrifice = Rs. 3,000
Journal Entry:
Disha’s Capital A/c Dr. 3,000
To Asha’s Capital A/c 3,000
Solution 7 (X, Y, and Z)
Average Profit = 2,25,000/5 = Rs. 45,000
Number of Years Purchase = 2
Goodwill = Rs. 90,000
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between X, Y, and Z = 5:3:2
New Ratio = 1:1:1
Gain/Sacrifice:
X = 1/6 (Sacrifice)
Y = -1/30 (Gain)
Z = -2/15 (Gain)
X’s Sacrifice = Rs. 15,000
Y’s Gain = Rs. 3,000
Z’s Gain = Rs. 12,000
Journal Entry:
Y’s Capital A/c Dr. 3,000
Z’s Capital A/c Dr. 12,000
To X’s Capital A/c 15,000
Solution 8 (Ram, Laxman, and Bharat)
Old Ratio between Ram, Laxman, and Bharat = 5:3:2
New Ratio = 1:1:1
Gain/Sacrifice:
Ram = 1/6 (Sacrifice)
Laxman = -1/30 (Gain)
Bharat = -2/15 (Gain)
Goodwill = Rs. 4,50,000
Ram’s Sacrifice = Rs. 75,000
Laxman’s Gain = Rs. 15,000
Bharat’s Gain = Rs. 60,000
Journal Entry:
Laxman’s Capital A/c Dr. 15,000
Bharat’s Capital A/c Dr. 60,000
To Ram’s Capital A/c 75,000
Ram’s Capital A/c Dr. 37,500
Laxman’s Capital A/c Dr. 22,500
Bharat’s Capital A/c Dr. 15,000
To Goodwill A/c 75,000
Solution 9 (A and B)
Valuation of Goodwill
Calculation of Aggregate Profits:
Year Ended 31 March 2021 = Rs. 60,000
Year Ended 31 March 2022 = Rs. 75,000
Total (Value of Goodwill) = Rs. 1,35,000
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between A and B = 2:1
New Ratio = 3:2
Gain/Sacrifice:
A = 1/15 (Sacrifice)
B = -1/15 (Gain)
A Sacrifices = Rs. 9,000
B Gains = Rs. 9,000
Journal Entry:
B’s Capital A/c Dr. 9,000
To A’s Capital A/c 9,000
Calculation of Past Adjustment:
| Particulars | A (Dr.) | A (Cr.) | B (Dr.) | B (Cr.) | Firm (Dr.) | Firm (Cr.) |
| Incorrect Profits | 60,000 | 30,000 | 90,000 | |||
| Correct Profits | 54,000 | 36,000 | 90,000 | |||
| Total | 60,000 | 54,000 | 30,000 | 36,000 | 90,000 | 90,000 |
| Net Adjustment | 6,000 Dr. | 6,000 Cr. |
Journal Entry:
A’s Capital A/c Dr. 6,000
To B’s Capital A/c 6,000
Preparation of Partner’s Capital A/c:
| Particulars | A (Rs.) | B (Rs.) | Particulars | A (Rs.) | B (Rs.) |
| A’s Capital A/c (Goodwill) | 9,000 | Balance b/d | 1,50,000 | 90,000 | |
| B’s Capital A/c | 6,000 | B’s Capital A/c (Goodwill) | 9,000 | ||
| Balance c/d | 1,53,000 | 87,000 | A’s Capital A/c | 6,000 | |
| Total | 1,59,000 | 96,000 | 1,59,000 | 96,000 |
Solution 10 (Nidhi, Vridhi, and Kavya)
Old Ratio between Nidhi, Vridhi, and Kavya = 2:2:1
Nidhi’s New Share = 2/5+3/25 = 13/25
Kavya’s New Share = 1/5+2/25 = 7/25
Vridhi’s New Share = 2/5-5/25 = 1/5
New Ratio between Nidhi, Vridhi, and Kavya = 13:5:7
Solution 11 (Nitya and Anand)
Profit and Loss A/c Dr. 1,50,000
To Nitya’s Capital A/c 75,000
To Anand’s Capital A/c 75,000
Solution 12 (Om and Shiv)
Om’s Capital A/c Dr. 80,000
Shiv’s Capital A/c Dr. 20,000
To Profit and Loss A/c 1,00,000
Solution 13 (A, B, and C)
i) Workmen Compensation Reserve A/c Dr. 1,20,000
To A’s Capital A/c 60,000
To B’s Capital A/c 36,000
To C’s Capital A/c 24,000
ii) Same as above
Solution 14 (X, Y, and Z)
Workmen Compensation Reserve A/c Dr. 1,20,000
To Workmen Compensation Claim A/c 80,000
To X’s Capital A/c 20,000
To Y’s Capital A/c 12,000
To Z’s Capital A/c 8,000
Solution 15 (Ashok, Bhim, and Chetan)
Workmen Compensation Reserve A/c Dr. 1,20,000
Revaluation A/c Dr. 30,000
To Workmen Compensation Claim A/c 1,50,000
Ashok’s Capital A/c Dr. 15,000
Bhim’s Capital A/c Dr. 9,000
Chetan’s Capital A/c Dr. 6,000
To Revaluation A/c 30,000
Solution 16 (A, B, and C)
Investment Fluctuation Reserve A/c Dr. 20,000
To Investment A/c 5,000
To A’s Capital A/c 7,500
To B’s Capital A/c 4,500
To C’s Capital A/c 3,000
Solution 17 (Nitin, Tarun, and Amar)
i) Investment Fluctuation Reserve A/c Dr. 60,000
To Nitin’s Capital A/c 20,000
To Tarun’s Capital A/c 20,000
To Amar’s Capital A/c 20,000
Note: Since the market value of investment is not given in the question, we assume that there is no fall in the value of investments. Therefore, the full reserve amount is transferred to the partner’s capital account.
ii) Investment Fluctuation Reserve A/c Dr. 60,000
To Nitin’s Capital A/c 20,000
To Tarun’s Capital A/c 20,000
To Amar’s Capital A/c 20,000
Note: The market value of the investment is the same as the book value. As there is no fall in the value of investments, the reserve is transferred to the partner’s capital accounts.
iii) Investment Fluctuation Reserve A/c Dr. 60,000
To Nitin’s Capital A/c 20,000
To Tarun’s Capital A/c 20,000
To Amar’s Capital A/c 20,000
Investments A/c Dr. 24,000
To Revaluation A/c 24,000
Revaluation A/c Dr. 24,000
To Nitin’s Capital A/c 8,000
To Tarun’s Capital A/c 8,000
To Amar’s Capital A/c 8,000
Note: The market value of the investment is higher than the book value. As there is no fall in the value of investments therefore the reserve is transferred to the partner’s capital accounts.
iv) Investment Fluctuation Reserve A/c Dr. 60,000
To Investment A/c 30,000
To Nitin’s Capital A/c 10,000
To Tarun’s Capital A/c 10,000
To Amar’s Capital A/c 10,000
v) Investment Fluctuation Reserve A/c Dr. 60,000
Revaluation A/c Dr. 30,000
To Investment A/c 90,000
Nitin’s Capital A/c Dr. 10,000
Tarun’s Capital A/c Dr. 10,000
Amar’s Capital A/c Dr. 10,000
To Revaluation A/c 30,000
Goodwill TS Grewal Solutions 2024-25
Solution 18 (Bootstrap and Davy Jones)
i) General Reserve A/c Dr. 60,000
To Bootstrap’s Capital A/c 40,000
To Davy Jones Capital A/c 20,000
ii) Calculation of Sacrificing/Gaining Ratio:
Old Ratio between Bootstrap and Davy Jones = 2:1
New Ratio = 3:2
Gain/Sacrifice:
Bootstrap = 1/15 (Sacrifice)
Davy Jones = -1/15 (Gain)
Value of General Reserve = Rs. 60,000
Bootstrap’s Sacrifice = Rs. 4,000
Davy Jones Gains = Rs. 4,000
Journal Entry:
Davy Jones’s Capital A/c Dr. 4,000
To Bootstrap’s Capital A/c 4,000
Solution 19 (Mita, Gopal, and Farhan)
Mita’s Capital A/c Dr. 15,000
Gopal’s Capital A/c Dr. 10,000
Farhan’s Capital A/c Dr. 5,000
To Deferred Advertisement Expenditure A/c 30,000
Contingency Reserve A/c Dr. 9,000
To Mita’s Capital A/c 4,500
To Gopal’s Capital A/c 3,000
To Farhan’s Capital A/c 1,500
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between Mita, Gopal, and Farhan = 3:2:1
New Ratio = 5:3:2
Gain/Sacrifice:
Mita = 0
Gopal = 1/30 (Sacrifice)
Farhan = -1/30 (Gain)
Value of Goodwill = Rs. 4,80,000
Farhan’s Capital A/c Dr. 16,000
To Gopal’s Capital A/c 16,000
Solution 20 (X, Y, and Z)
General Reserve = Rs. 6,000
Profit and Loss A/c (Cr. balance) = Rs. 24,000
Advertisement Suspense A/c = (12,000)
Total Accumulated Profits = Rs. 18,000
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between X, Y, and Z = 5:3:2
New Ratio = 2:3:5
Gain/Sacrifice:
X = 3/10
Y = 0
Z = -3/10
X’s Sacrifice = Rs. 5,400
Z’s Gain = (5,400)
Journal Entry:
Z’s Capital A/c Dr. 5,400
To X’s Capital A/c 5,400
Solution 21 (Bhavya and Sakshi)
Investment Fluctuation Reserve:
Investment Fluctuation Fund A/c Dr. 20,000
To Investment A/c 10,000
To Bhavya’s Capital A/c 6,000
To Sakshi’s Capital A/c 4,000
Goodwill:
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between Bhavya and Sakshi = 3:2
New Ratio = 1:1
Gain/Sacrifice:
Bhavya = 1/10 (Sacrifice)
Sakshi = -1/10 (Gain)
Value of Goodwill = Rs. 24,000
Bhavya’s Sacrifice = Rs. 2,400
Sakshi’s Gain = Rs. 2,400
Journal Entry:
Sakshi’s Capital A/c Dr. 2,400
To Bhavya’s Capital A/c 2,400
General Reserve:
Since the general reserve will not be distributed among the partners, we will adjust it through the partners’ capital a/cs.
Value of General Reserve = Rs. 23,400
Bhavya’s Sacrifice = Rs. 2,340
Sakshi’s Gain = Rs. 2,340
Journal Entry:
Sakshi’s Capital A/c Dr. 2,340
To Bhavya’s Capital A/c 2,340
Solution 22 (Hari, Kunal, and Uma)
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between Hari, Kunal, and Uma = 5:3:2
New Ratio = 2:5:3
Gain/Sacrifice:
Hari = 3/10 Sacrifice)
Kunal = -1/15 (Gain)
Uma = -1/10 (Gain)
Journal Entries:
Kunal’s Capital A/c Dr. 60,000
Uma’s Capital A/c Dr. 30,000
To Hari’s Capital A/c 90,000
Investment Fluctuation Fund A/c Dr. 15,000
To Investment A/c 15,000
Profit and Loss A/c Dr. 75,000
To Hari’s Capital A/c 37,500
To Kunal’s Capital A/c 22,500
Uma’s Capital A/c 15,000
Revaluation A/c Dr. 5,000
To Stock A/c 5,000
Hari’s Capital A/c Dr. 2,500
Kunal’s Capital A/c Dr. 1,500
Uma’s Capital A/c Dr. 1,000
To Revaluation A/c 5000
Solution 23 (A and B)
| Asset/Liability | Book Value | Revised Value | Gain | Loss |
| Machinery | 2,50,000 | 3,00,000 | 50,000 | |
| Computers | 2,00,000 | 1,75,000 | 25,000 | |
| Sundry Creditors | 90,000 | 75,000 | 15,000 | |
| Outstanding Expenses | 15,000 | 25,000 | 10,000 |
Net Gain = Rs. 30,000
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between A, B, and C = 2:2:1
New Ratio = 5:3:2
Gain/Sacrifice:
A = -1/10 (Sacrifice)
B = 1/10 (Sacrifice)
Journal Entry:
A’s Capital A/c Dr. 3,000
To B’s Capital A/c 3,000
Solution 24 (Ajeet, Vijeet and Sujeet)
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between Ajeet, Vijeet, and Sujeet = 5:3:2
New Ratio = 2:5:3
Gain/Sacrifice:
Ajeet = 3/10 (Sacrifice)
Vijeet = -1/5 (Gain)
Sujeet = -1/10 (Gain)
Calculation of Net Gain/Loss:
| Particulars | Gain | Loss |
| Land | 2,50,000 | |
| Stock | 3,00,000 | |
| Total | 2,50,000 | 3,00,000 |
| Net Loss | 50,000 |
Journal Entry:
Ajeet’s Capital A/c Dr. 15,000
To Vijeet’s Capital A/c 10,000
To Sujeet’s Capital A/c 5,000
Solution 25 (Pinky and Rocky)
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between Pinky and Rocky = 3:2
New Ratio = 1:1
Gain/Sacrifice:
Pinky = 1/10 (Sacrifice)
Rocky = -1/10 (Gain)
Journal Entry for Gain on Building:
Market Value of Building = Rs. 90,000
Less: Book Value of Building = (72,000)
Gain on Building = Rs. 18,000
Rocky’s Capital A/c Dr. 1,800
To Pinky’s Capital A/c 1,800
Solution 26 (A, B, and C)
Revaluation A/c
| Particulars | Amt. (Rs.) | Particulars | Amt. (Rs.) |
| Building A/c | 3,000 | Land A/c | 30,000 |
| Profits transferred to: A’s Capital A/c: 16,500 B’s Capital A/c: 11,000 C’s Capital A/c: 5,500 | 33,000 | Creditors A/c | 6,000 |
| Total | 36,000 | 36,000 |
Partner’s Capital A/c
| Particulars | A (Rs.) | B (Rs.) | C (Rs.) | Particulars | A (Rs.) | B (Rs.) | C (Rs.) |
| A’s Capital A/c (Goodwill) | 25,000 | Balance b/d | 1,00,000 | 50,000 | 25,000 | ||
| Balance c/d | 1,56,500 | 71,000 | 10,500 | C’s Capital A/c | 25,000 | ||
| Revaluation A/c | 16,500 | 11,000 | 5,500 | ||||
| General Reserve A/c | 15,000 | 10,000 | 5,000 | ||||
| Total | 1,56,500 | 71,000 | 35,500 | 1,56,500 | 71,000 | 35,500 |
Balance Sheet
| Liabilities | Amt. (Rs.) | Assets | Amt. (Rs.) |
| Creditors Bills Payable A’s Capital A/c B’s Capital A/c C’s Capital A/c | 44,000 20,000 1,56,500 71,000 10,500 | Land Building Plant Stock Debtors Bank | 80,000 47,000 1,00,000 40,000 30,000 5,000 |
| Total | 3,02,000 | 3,02,000 |
Working Note: Calculation of Sacrificing/Gaining Ratio
Old Ratio between A, B, and C = 3:2:1
New Ratio = 1:1:1
Gain/Sacrifice:
A = 1/6 (Sacrifice)
B = 0
C = -1/6 (Gain)
Journal Entry for Goodwill:
C’s Capital A/c Dr. 25,000
To A’s Capital A/c 25,000
Solution 27 (X and Y)
Valuation of Goodwill:
Average Profits = Rs. 6,000
No. of Years Purchase = 2
Goodwill = Rs. 12,000
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between X and Y = 5:3
New Ratio = 3:5
Gain/Sacrifice:
X = 1/4 (Sacrifice)
Y = -1/4 (Gain)
Journal Entry for Goodwill:
Y’s Capital A/c Dr. 3,000
To X’s Capital A/c 3,000
Revaluation A/c
| Particulars | Amt. (Rs.) | Particulars | Amt. (Rs.) |
| Profits transferred to: X’s Capital A/c: 5,000 Y’s Capital A/c: 3,000 | 8,000 | Machinery A/c | 7,000 |
| Stock A/c | 1,000 | ||
| Total | 8,000 | 8,000 |
Journal Entry for Workmen Compensation Reserve:
Workmen Compensation Reserve A/c Dr. 10,000
To Workmen Compensation Claim A/c 6,000
To X’s Capital A/c 2,500
To Y’s Capital A/c 1,500
Partner’s Capital A/cs
| Particulars | X (Rs.) | Y (Rs.) | Particulars | X (Rs.) | Y (Rs.) |
| X’s Capital A/c | 3,000 | Balance b/d | 52,000 | 54,000 | |
| Goodwill A/c | 5,000 | 3,000 | Y’s Capital A/c | 3,000 | |
| Advertisement Suspense A/c | 500 | 300 | Revaluation A/c | 5,000 | 3,000 |
| Balance c/d | 60,000 | 54,000 | Workmen Compensation Reserve A/c | 2,500 | 1,500 |
| General Reserve A/c | 3,000 | 1,800 | |||
| Total | 65,500 | 60,300 | 65,500 | 60,300 |
| Liabilities | Amt. (Rs.) | Assets | Amt. (Rs.) |
| Employees Provident Fund Sundry Creditors Workmen Compensation Claim X’s Capital A/c Y’s Capital A/c | 1,000 5,000 6,000 60,000 54,000 | Machinery Furniture Sundry Debtors Stock Bank | 45,000 15,000 33,000 8,000 25,000 |
| Total | 1,26,000 | 1,26,000 |
Solution 28 (Ram, Mohan, Sohan, and Hari)
| Particulars | Amt. (Rs.) | Particulars | Amt. (Rs.) |
| Workmen Compensation Claim A/c | 30,000 | Loss Transferred to: Ram’s Capital A/c: 12,000 Mohan’s Capital A/c: 9,000 Sohan’s Capital A/c: 6,000 Hari’s Capital A/c: 3,000 | 30,000 |
| Total | 30,000 | 30,000 |
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between Ram, Mohan, Sohan and Hari = 4:3:2:1
New Ratio = 1:2:3:4
Gain/Sacrifice:
Ram = 3/10 (Sacrifice)
Mohan = 1/10 (Sacrifice)
Sohan = -1/10 (Gain)
Hari = -3/10 (Gain)
Value of Goodwill = Rs. 1,80,000
Journal Entry for Goodwill:
Sohan’s Capital A/c Dr. 18,000
Hari’s Capital A/c Dr. 54,000
To Ram’s Capital A/c 54,000
To Mohan’s Capital A/c 18,000
Solution 29 (Suresh, Ramesh, Mahesh and Ganesh)
| Particulars | Amt. (Rs.) | Particulars | Amt. (Rs.) |
| Workmen Compensation Claim A/c | 25,000 | Loss Transferred to: Suresh’s Capital A/c: 17,000 Ramesh’s Capital A/c: 17,000 Mahesh’s Capital A/c: 25,500 Ganesh’s Capital A/c: 25,500 | 85,000 |
| Fixed Assets A/c | 60,000 | ||
| Total | 85,000 | 85,000 |
Calculation of Sacrificing/Gaining Ratio:
Old Ratio between Suresh, Ramesh, Mahesh, and Ganesh = 2:2:3:3
New Ratio = 1:1:1:1
Gain/Sacrifice:
Suresh = -1/20 (Gain)
Ramesh = -1/20 (Gain)
Mahesh = 1/20 (Sacrifice)
Ganesh = 1/20 (Sacrifice)
Value of Goodwill = Rs. 90,000
Journal Entry for Goodwill:
Suresh’s Capital A/c Dr. 4,500
Ramesh’s Capital A/c Dr. 4,500
Mahesh’s Capital A/c 4,500
Ganesh’s Capital A/c 4,500
So these are the Change in Profit Sharing Ratio TS Grewal Solutions 2024-25. If you have any doubt, you can ask in the comment section.