Question

Boro and kalita are pertners sharing profits and losses in the ratio of 4:3. Limbu is admitted as a new pertner. For limbu's admission , goodwill of the firm is valued at 35000. Limbu brings in 42000 as capital. but he couldn't bring his premium for goodwill. Boro, kalita and limbu will share profits in the ratio of 2:2:1. give journal entries​

Answer 1

Explanation:

s.r of boro: 4/7-2/5= 6/35

s.r of kalita: 3/7-2/5= 1/35

sr= 6:1

g/w of firm= 35000

limbu's share: 35000×1/5= 7000

cash a/c. 42000

to limbu's capital a/c. 42000

limbu's current a/c. 7000

to boro's capital a/c 6000

to kalita's capital a/c. 1000

(Goodwill not brought in cash)