Question

Goodwill/Premium brought in Cash by the New Partner and retained in the Business
(19) Dev and Narain are partners sharing profits and losses in the ratio of 3:2. They admit Arpit into panen
who brings in 48,000 for 1/4th share for goodwill. Pass necessary Journal entries to record the transactions​

Answer 1

Answer:

Required Journal Entries :

• Cash ac Dr. 36,000

To Arpit's Capital ac 36,000

( Arpit brings Capital )

• Cash ac Dr 48000

To Arpit's Capital ac. 36,000

To Goodwill ac 12,000

( Amount brought in by Arpit as capital and goodwill )

• Arpit's Capital ac Dr. 12000

To Dev's Capital ac. 7200

To Narain's Capital ac. 4800

( Goodwill distributed to old partner's capital account )

Notes :

Goodwill must be distributed in Old partner's Sacrificing ratio.

That is here, 3 : 2.

Working Note :

Capital brought by Arpit - 48,000

Share of Goodwill - 1 /4 th share of capital

= 48,000 × 1 / 4

= 12,000

Share of Goodwill - 12,000

Goodwill's Share to Partner's Capital ac :

Sacrificing Ratio - 3 : 2

Dev :

= 12,000 × 3 / 5

= 36,000 / 5

= 7,200

Narain :

= 12,000 × 2 / 5

= 24,000 / 5

= 4,800

Share Of Goodwill to Dev and Narain are 7,200 and 4,800.

Answer 2

Old Ratio=3:2

New partner(Arpit) brings Rs.48000 for goodwill

So, Dev's capital a/c will be credited by 28800(3/5×48000)

And, Narain's capital a/c will be credited by 19200(2/5×48000)