Question

A and B are partners sharing profit in the ratio of 2:1 .they admit c for 1/4 sharing profit.c brings in rs 30000 for his capital and 8000 out of his share of 10000 for goodwill. before admission Goodwill existed in the book at 18000 pass journal entry to give effectively above the arrangements

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Answer 1

Answer:

A's Capital a/c.... Dr. 12000

B's Capital a/c.... Dr. 6000

To Goodwill a/c 18000

(Being goodwill written off in the ratio of 2:1)

2. Cash a/c.... Dr. 38000

To C's Capital a/c 30000

To Premium for Goodwill a/c 8000

(Being capital and part premium for goodwill brought in by C)

3. Premium for Goodwill a/c... Dr. 8000

C's Capital a/c.... Dr. 2000

To A's Capital a/c 6667

To B's Capital a/c 3333

(Being premium for goodwill distributed among the partners in the ratio of 2:1)

Working Note:

Distribution of premium for goodwill:

A's share= 10000 * 2/3= 6667

B's share= 10000 * 1/3= 3333

Explanation:

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