Question

Illustration 21 (When An Existing Partner also Gains on Admission of New Partner).
Ram and Shyam are partners sharing profits and losses in the ratio of 4 : 1. They admit
Mohan into the partnership on 1st April, 2019 for 1/3rd share in profits. It was agreed that
Ram, Shyam and Mohan would share profits equally in future. Mohan brought in 50,000 as
goodwill for his 1/3rd share in profits. Pass necessary Journal entries in the books of the firm.
Solution:
JOURNAL
Particulars
Dr. Cr. R)
LF
Date
2019
April
...Dr.
50,000
50,000
...Dr.
April
1 Bank A/c
To Premium for Goodwill Alc
(Being the goodwill premium brought in by Mohan)
1 Premium for Goodwill A/C
Shyam's Capital A/C
To Ram's Capital A/C
(Being the sacrificing partner Ram's Capital Account credited with
value of goodwill for his sacrificed share) (WN)
50,000
20,000
...Dr.
70,000​

Answer 1

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