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Partnership Accounts-IV (Admission of a Partner)
24. (Goodwill Partially Withdrawn) Behari and Punjabi are partners in 2 : 3 ratio Haryanvi
is admitted for share. He brings cash 50,000 for capital and goodwill Total goodwill is
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30,000. Behari and Punjabi as per agreement withdrew 20% of goodwill amount and
balance was transferred to their loan account carrying 10% interest
Pass journal entries.
Hint Cash withdrawn by Behari and Punjabi 800 and 1.200 and loan credited to them
38.200 and 7 4.800.1
aring profits in the
Answers
ANSWER
JOURNAL
1. Cash a/c..... Dr. 50000
Machinery a/c... Dr. 70000
To Premium for goodwill a/c 120000
(Being cash and machinery brought in by G for his share of profit as premium for goodwill)
2. Premium for Goodwill a/c... Dr. 120000
F's Capital a/c... Dr. 30000
To E's Capital a/c 150000
(Being premium for goodwill and F's gain transferred to E)
Working Note:
1. Calculation of sacrificing ratio:
E's old ratio= 3/4
F's old ratio= 1/4
New ratio of firm after admission= 1:1:1
Sacrificing ratio = Old ratio - New ratio
E's sacrifice = 3/4- 1/3= 5/12
F's gain = 1/4- 1/3= -1/12
2. Total goodwill of the firm= 120000*3/1= 360000
F's gain= 360000 * 1/12= 30000