Question

Neeta and Sumita are partners sharing profits and losses in the ratios of 2:1. They admit Geeta as a partner for 1/4th share. Geeta pays Rs. 100,000 as capital. The goodwill of the new firm is valued at Rs. 80,000. Give Journal entries when Geeta is able to bring only ₹14,000 as his share of goodwill in cash​

Answer 1

Answer:

Geeta share in Firm goodwill = 80000×1/4=20000

Geeta brings her share of goodwill 14000 in cash out of 20000

sidhe us unable to bring remaining share if goodwill 6000 in cash

Sacrifice ratio = 2:1

Journal entries

Bank account. dr 114000

To Geeta' capital account. 100000

To premium for goodwill. 14000

Premium for goodwill. dr. 14000

Geeta ' current account dr. 6000

To Neeta 'capital account. 13333

To Sunita 'capital account. 6667