2. Anubhav and Babita are partners in a firm sharing profits and losses in the ratio of 3:2. On April 1,
2015 they admit Deepak as a new partner for 3/13 share in the profits. Deepak contributed the
following assets towards his capital and for his share of goodwill. Land Rs. 90,000, Machinery Rs.
70,000 stock Rs. 60,000 and debtors Rs. 40,000. On the date of admission of Deepak, the goodwill
of the firm was valued at Rs. 5,20,000, which is not appear in the books. Record necessaries
journal entries in the books of the firm. Show your calculation clearly.
Answers
Answer:
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Explanation:
Land A/c Dr. 90,000
Machinery A/c Dr. 70,000
Stock A/c Dr. 60,000
Debtors A/c Dr . 40,000
To Premium for Goodwill A/c 1,20,000
(520000*3/13)
To Deepak’s Capital A/c (Balancing figure) 140,000
(Being the amount of goodwill and capital brought in kind by new partner)
Premium for Goodwill A/c Dr. 1,20,000
To Anubhav’s Capital A/c 72,000
To Babita’s Capital A/c 48,0000
(Being the amount of goodwill distributed between Anubhav and Babita in their sacrificing ratio i.e., 3 : 2)
Note : Here Sacrificing Ratio = Old Ratio i.e., 3 : 2
Case (iii) Amount of goodwill which was brought in by new partner, is withdrawn by old partner :
In this case one additional journal entry may be passed :
Old Partners’ Capital A/c Dr.
To Bank/Cash A/c
(Cash withdrawn by old partners)
Case (iv) when the new partner is unable to bring his share of goodwill in cash.
Sometimes the new partner does not bring his share of goodwill in cash. Then his share of goodwill is calculated and adjusted by the following Journal entry.
New Partners’ Capital Dr.
To old partners Capital A/cs
(in the sacrificing ratio)
Answer:
1 journal entry
land a/c. Dr. 90000
machinery a/c Dr. 70000
stock a/c. Dr. 60000
debtors a/c. Dr. 40000
to premium for g/w. 40000
to Deepak's a/c. 120000
2 journal entry
premium for g/w a/c Dr 120000
to anubhav's /c 72000
to babita's a/c. 42000