Question

identify the following journal entry : Jojo's capital a/c 600, saji's capital a/c 800,To profit and loss a/c 1400​

Answer 1

Answer:

(a) JOURNAL

1. Cash a/c.... Dr. 2000

To Premium for Goodwill a/c 2000

(Being premium for goodwill brought in by D)

2. Premium for Goodwill a/c..... Dr. 2000

To B's Capital a/c 1200

To C's Capital a/c 800

(Being premium brought in by D distributed among the partners in the ratio of 3:2)

Working note:

Distribution of goodwill:

B's share= 3/5 * 2000 = 1200

C's share= 2/5 * 2000= 800

(b) JOURNAL

1. Cash a/c........ Dr. 2100

To Premium for Goodwill a/c 2100

(Being premium for goodwill brought in by D)

2. Premium for Goodwill a/c..... Dr. 2100

To B's Capital a/c 1400

To C's Capital a/c 700

(Being premium brought in by D distributed among the partners in the ratio of 2:1)

Working note:

1. Sacrificing ratio:

B's sacrifice= 1/6

C's sacrifice= 1/12

Ratio= 2:1

2. Distribution of goodwill:

B's share= 2/3 * 2100 = 1400

C's share= 1/3 * 2100 = 700