Question

23. (Goodwill Partially withdrawn) A and B are partners in 3 : 2 ratio. They admitted for share. He brings 70,000 of which 40,000 in his capital and remaining amount in his goodwill . The old partners withdrew 50% of the share of goodwill Record the transaction in Journal [Ans. Amount Withdrawn A9.000, B6,000)​

Answer 1

Answer:

JOURNAL

1. Cash a/c                                   Dr.                    21000

            To Premium for goodwill a/c                                21000

(Being Premium for goodwill brought in by C)

2. Premium for goodwill a/c       Dr.                   21000

               To A's Capital a/c                                             9000

                 To B's Capital a/c                                             12000

(Being premium for goodwill brought in by C, distributed among the partners in the ratio 3:4)

Explanation:

Working Note:

A's old share= 3/5

B's old share= 2/5

C is admitted as a new partner.  

A's sacrifice= 3/5 * 1/5  

                  = 3/25

B's sacrifice= 2/5 * 2/5

                   = 4/25

Sacrificing ratio= 3:4

C's share= 3/25 + 4/25

            = 7/25

Hence, C's share of goodwill= 7/25 * 75000  = 21000

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