Question

23. A and B are partners sharing profits and losses in the ratio of 7:5. They admit C, their Manager, into
partnership who is to get 1/6th share in the business. C brings in 10,000 for his capital and 3,600 for
the 1/6th share of goodwill which he acquires 1/24th from A and 1/8th from B. Profit for the first year
of the new partnership was? 24,000. Pass necessary Journal entries for C's admission and apportion the
profit between the partners.​

Answer 1

Answer:

cash account..... dr 13,600

to C's capital account 10,000

to premium for goodwill 3600

premium for goodwill account... Dr 3600

to A's capital account 900

to B's capital account 2700

profit and loss account .. ... Dr 24,000

to A' s capital account

to B capital account