Q.23. Amar and Samar were partners in a firm sharing profits and losses in 3:1 ratio.

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Q.23. Amar and Samar were partners in a firm sharing profits and losses in 3:1 ratio. They admitted Kanwar for 1/4 share of profits. Kanwar could not bring his share of goodwill premium in cash. The Goodwill of the firm was valued at Rs. 80,000 on Kanwar’s admission. Record necessary journal entry for goodwill on Kanwar’s admission.

SOLUTION

Journal
DateParticularsL.F.Amount (Dr.)Amount (Cr.)
Kanwar’s capital A/cDr.20,000
    To Amar’s capital A/c15,000
    To Samar’s capital A/c5,000
(Kanwar’s share of Goodwill charged from his capital Account by Amar and Samar)

Old ratio=3:1

New partner Kanwar admitted for = 1/4 th share of profit

New firm’s Goodwill=80,000

Kanwar’s share of Goodwill=80,000 X 1/4 = 20,000


Old ratio=3:1

New partner Kanwar admitted for = 1/4 th share of profit

New firm’s Goodwill=80,000

Kanwar’s share of Goodwill=80,000 X 1/4 = 20,000

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