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Q. 70. A, B and C were partners in a firm sharing profits in the ratio of 2:1:1.
Their respective capitals were A 33,00,000; B 32,00,000 and C 31,80,000. On 1st
April, 2018 they admitted D as a new partner. D brought 32,00,000 for his capital and
necessary amount for his share of goodwill premium. The new profit sharing ratio
between A, B, C and D will be 1:2:1:1.
Pass necessary journal entries for the above transactions in the books of the firm
on D's admission.
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Answer:
calculation of hidden goodwill :->
total capital of new firm = 32,00,000×5/1 = 1,60,00,000
less :-> existing capital = (33,00,000 + 32,00,000 + 31,80,000 + 32,00,000 = 31,20,000
hidden goodwill = 31,20,000
share of D = 31,20,000×1/5 = 6,24,000
D's current account..... Dr 6,24,000
B's capital account..... Dr. 4,68,000
to A 's capital account 9,36,000
to C 's capital account 1,56,000
sacrificing ratio = old ratio - new ratio
A = 2/4 - 1/5 = 6/20 sacrifice
B = 1/4 - 2/5 = -3/20 -- gain
C = 1/4 - 1/5 = 1/20 sacrifice
share of B contributed = 31,20,000×3/20 = 4,68,000
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