Question

Anil Sunil and Sanjay have omitted interest on capital for 2 years and 31st March 2016 their fixed capital in 2 years Anil 800000 and Sunil 7lakh and Sanjay 3 lakh rate of interest on capital is 10% per annum their profit sharing ratio will in the first year 4 ratio 3 ratio 2 and II ratio 3 ratio 2 ratio 1 give necessary adjustment entry at the beginning of next year​

Answer 1

Cash a/c.... Dr. 320000

To Charu's Capital a/c 320000

(Being capital brought in by Charu)

2. Charu's Current a/c........ Dr. 100000

To Anil's Capital a/c 50000

To Sunil's Capital a/c 50000

(Being Charu's share of goodwill adjusted through the current accounts)

Working Note:

Calculation of Hidden Goodwill:

Total Capital of the firm after admission= 320000+240000+320000

= 880000

Total Capital of the firm based on Charu's capital= 320000 * 4/1

= 1280000

Therefore, Hidden Goodwill= 1280000- 880000

= 400000

Charu's share of goodwill= 400000 * 1/4= 100000

Answer 2

Explanation:

Cash a/c.... Dr. 320000

To Charu's Capital a/c 320000

(Being capital brought in by Charu)

2. Charu's Current a/c........ Dr. 100000

To Anil's Capital a/c 50000

To Sunil's Capital a/c 50000

(Being Charu's share of goodwill adjusted through the current accounts)

Working Note:

Calculation of Hidden Goodwill:

Total Capital of the firm after admission= 320000+240000+320000

= 880000

Total Capital of the firm based on Charu's capital= 320000 * 4/1

= 1280000

Therefore, Hidden Goodwill= 1280000- 880000

= 400000

Charu's share of goodwill= 400000 * 1/4= 100000

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