Question

A and B are partners sharing profits in the ratio of 3 : 2. Their books show goodwill at ₹ 2,000. C is admitted with 1/4th share of profits and brings in ₹ 10,000 as his capital but is not able to bring in cash for his share of goodwill ₹ 3,000. Draft journal entries.

Answer 1

sorry l don't know about this question

Answer 2

Solution:

                                             Journal  

Particulars                                          Debit Rs.        Credit Rs.

A's Capital A/c                  Dr.            1,200

B's Capital A/c                  Dr.             800

   To Goodwill A/c                                                        2,000

(Being goodwill written-off at the time of C's admission)

Cash A/c                           Dr.              10,000

    To C's Capital A/c                                                  10,000

(Being Capital brought by C)

C's Capital A/c                  Dr.               3,000

   To A's Capital A/c                                                        1,800

   To B's Capital A/c                                                        1,200

(Being C's share of capital charged from his capital distributed between A and B in their sacrificing ratio)  

Working Notes:

Writing off of goodwill appearing in the books:

Debit A's A/c = 3000 x $\frac{3}{5}$ = 1,200

Debit B's A/c = 3000 x $\frac{3}{5}$ = 800