Question

A and B were partner in a firm sharing profits in the ratio 4:1 they admit C as a new partner on 1-3-2019 for 1/5th share.it was decided that A B ans C share future profit in the ratio 5:3:2 . C brought ₹20000 in cash and machine worth ₹60000for his share of profit as premium for goodwill showing your calculations clearly pass necessary journal entries in the books of the firm.

Answer 1

Answer:

a.bank a/c dr. 80000

to premium for goodwill a/c 60000

to c's capital a/c 20000

b. premium for goodwill a/c dr. 60000

to premium for goodwill a/c 45000

to c's capital a/c. 15000

Explanation:

1.sacrificing ratio of A= 4/5-5/10=3/10

sacrificing ratio of B=1/5-3/10= -1/10

2. calculation of goodwill

sacrificing ratio= 3:-1

goodwill- 60000

60000*3/4=45000

60000*1/4=15000