Question

11. X and Y are partners sharing profits and losses in the ratio of 7:5. They admit Z into partnership by
giving him 1/6th share in profits which he acquires equally from X and Y Z paid in cash 75,000 as
his capital, but he is unable to bring his share of goodwill 12.000 in cash. Pass necessary journal entries.
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Answer 1

Answer:

Premium for goodwill is the additional amount brought in by the incoming partner to compensate the existing partners for their sacrifice in the profits of the firm. Since, Z acquires his entire share from Y, only Y is to be compensated for the loss and it is not to be distributed equally among the partners. Hence, the entire amount of premium is credited to Y's Capital account.

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Answer 2

Explanation:

let,X,= 7.5

and y=a

75000

22000568