20. Emmie and Florence are partners sharing profits and losses in the ratio of 4 : 1
partner for which he pays ?glen is admitted for which he pays10,000 as premium for goodwill and in future Emmie, Flore
to share profits and losses in the ratio of 2:1:1 respectively.
You are required to pass necessary Journal entries in the books of firm.
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Answer:bank a/c dr. 10,000
to premium for goodwill a/c 10,000
premium for goodwill a/c dr 10,000
florence's capital a/c dr 2,000
to emmie's capital a/c 12,000
Explanation:
hidden goodwill will be 40,000 (10,000*4)
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