Question

4
Hint: Hidden Goodwill = ( 80,000 x 4/1) - R50,000 + 50,000 + 40,000 + 80,000).
Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with 1/5th share in the profits
of the firm. Ajay brings 5,00,000 as his share of capital. The value of the total assets of the firm was
* 15,00,000 and outside liabilities were valued at 5,00,000 on that date. Give necessary Journal entry
to record goodwill at the time of Ajay's admission. Also show your workings.
AI 2013)​

Answer 1

Answer:

total capital of new firm = 5,00,000×5/1 = 25,00,000

existing capital = (15,00,000-5,00,000) + 5,00,000

= 25,00,000 - 15,00,000 = 10,00,000 (goodwill)

share of ajay = 10,00,000×1/5 = 2,00,000

cash A/C.... dr. 5,00,000

to ajay's capital 5,00,000

ajay's current A/C.... Dr. 2,00,000

to asin's capital A/C... 1,00,000

to shreyas's capital A/C.. 1,00,000