O Q. 23. K and Y were partners in a firm sharing profits in 3 : 2 ratio. They admitted
Z as a new partner for 1/3rd share in the profits of the firm. Z acquired his share from
K and Yin 2 : 3 ratio. Z brought 80,000 for his capital and 30,000 for his 1/3rd share
as premium. Calculate the new profit sharing ratio of K, Y and Z and pass necessary
journal entries for the above transactions in the books of the firm.
Answers
Answer:
Stock a/c.... Dr. 60000
Debtors a/c... Dr. 80000
Land a/c.... Dr. 100000
Plant and machinery a/c... Dr. 40000
To Z's Capital a/c 130000
To Premium for goodwill a/c 150000
(Being capital and premium for goodwill brought in by C in the form of assets)
2. Premium for Goodwill a/c.... Dr. 150000
To X's Capital a/c 90000
To Y's Capital a/c 60000
(Being premium for goodwill distributed among partners in the ratio of 3:2)
Working Note:
1. Calculation of Z's share of goodwill:
Z's share of Goodwill= 600000 * 1/4= 150000
Z's share of capital = 280000 - 150000 = 130000
2. Distribution of premium for goodwill:
X's share= 3/5 * 150000= 90000
Y's share= 2/5 * 150000= 60000
Explanation:
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