Question

(Goodwill is partly paid privately and partly through books ) A and B are partner in 3:4 ratio . Value of firm 's goodwill is rs. 56000. C is admitted for 1/4 share .He brings capital rs. 20000.He paid rs.3000 cash for goodwill privately and the balance of his share through the books of firm .Pass entries

Answer 1

Answer:

1. A's Capital a/c.... Dr. 1200

B's Capital a/c.... Dr. 800

To Goodwill a/c 2000

(Being goodwill written off in the ratio of 3:2)

2. Cash a/c...... Dr. 10000

To C's Capital a/c 10000

(Being capital brought in by C)

3. C's Capital.... Dr. 3000

To A's Capital a/c 1800

To B's Capital a/c 1200

(Being C's share of goodwill charged to his capital account and distributed among the partners in the ratio of 3:2)