Question

Amar and Samar were partners in a firm sharing profits and losses in 3:1 ratio. They admitted Kanwar for 1/4 share of profits. Kanwar could not bring his share of goodwill premium in cash. The Goodwill of the firm was valued at Rs. 80,000 on Kanwar’s admission. Record necessary journal entry for goodwill on Kanwar’s admission.

Answer 1

Answer:

Premium for Goodwill A/C dr 20000

To Kunwar's capital A/C. 20000

Explanation:

Firm Goodwill=80,000

Kunwar share of Goodwill=1/4

80,000×1/4=20000