Question

3. A and B are partners sharing profits in the
ratio of 3:2. Their books showed goodwill at
3,000. C is admitted with 1/4th share of
profits and brings 10,000 as his capital. But
he is not able to bring in cash for his share of
goodwill * 3,000. How will you treat this?​

Answer 1

First you have to write off the old goodwill to the old partners in the old ratio.

Then you have to show the admission of C by bringing up his capital and then his payment of compensation to the old partners in the sacrificing ratio.

Since he is not able to bring his goodwill in cash, he will distribute it among the partners by taking the amount from the capital he brought.

See the attachment.