Question

A and B are partners sharing profits and losses in the ratio of 4:1.They admit C into partnership for 1/6th share for which he pays Rs.20, 000 for goodwill. A, B and C decide to share future profits in the ratio of 3:2:1.Give the necessary journal entries.

Answer 1

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.Goodwill brought in by new partner = Total goodwill of firm * C's share of profit

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.Goodwill brought in by new partner = Total goodwill of firm * C's share of profitGoodwill brought in by new partner = Rs. 9600 * (1/4) = Rs. 2400

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.Goodwill brought in by new partner = Total goodwill of firm * C's share of profitGoodwill brought in by new partner = Rs. 9600 * (1/4) = Rs. 2400Goodwill brought in by C on his admission is distributed among A and B in their old ratio i.e., 3 : 2

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.Goodwill brought in by new partner = Total goodwill of firm * C's share of profitGoodwill brought in by new partner = Rs. 9600 * (1/4) = Rs. 2400Goodwill brought in by C on his admission is distributed among A and B in their old ratio i.e., 3 : 2Amount withdrawn by-

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.Goodwill brought in by new partner = Total goodwill of firm * C's share of profitGoodwill brought in by new partner = Rs. 9600 * (1/4) = Rs. 2400Goodwill brought in by C on his admission is distributed among A and B in their old ratio i.e., 3 : 2Amount withdrawn by-A = Rs. 2400 * (3/5) = 1440

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.Goodwill brought in by new partner = Total goodwill of firm * C's share of profitGoodwill brought in by new partner = Rs. 9600 * (1/4) = Rs. 2400Goodwill brought in by C on his admission is distributed among A and B in their old ratio i.e., 3 : 2Amount withdrawn by-A = Rs. 2400 * (3/5) = 1440B = Rs. 2400 * (2/5) = 960

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