Question

2. Mand Nare partners in a firm sharing profits and losses in the ratio 3:2. They admitted P on the condition that profit sharing ratio of Nand P will be 3: 2. Find the new profit sharing ratio of M, N and P.​

Answer 1

JOURNAL

1 Cash a/c Dr 25000

To Premium for Goodwill a/c 25000

(Being premium for goodwill brought in by R)

2. Premium for Goodwill a/c Dr 25000

To M's Capital a/c 12500

To J's Capital a/c 12500

(Being premium for goodwill brought in by R distributed in the ratio of 1:1)

Working Note:

1 Calculation of sacrificing ratio:

M's sacrifice= 3/5- 5/10 = 1/10

J's sacrifice= 2/5- 3/10 = 1/10

Sacrificing ratio= 1:1

2 Distribution of goodwill

M's share= 1/2 * 15000= 12500

J's share= 1/2 * 15000= 12500

I hope this help you