A and B are partners with capital of ₹13000 and ₹9000 respectively.They admit C as a partner for 1/5th share in the firm.C brings ₹8000 as his capital.Give Journal entries to record goodwill.
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Hidden Goodwill
Capitalised value of the firm = capital of new partner × reciprocal of new partner’s share
=8000*5/1
=40000
Net worth = total capital of new firm(including new partner’s capital ) + accumulated profits and reserve
=(13000+9000+8000)
=30000
Value of goodwill = capitalised value of the firm - net worth
=40000-30000
Value of goodwill =10000
Hope its useful.!!
sujiritha95:
c's goodwill =10000*1/5 = 20000
sorry its 2000
journal entry c's goodwill a/c Dr 2000 to A's capital a/c 1000 To B's capital 1000
as old profit sharing ratio not given i assumed as equal ratio
hope u understood
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0
Answer:
hidden goodwill = 2000
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