P and Q are partners sharing profits in the ratio of 7:5 . They admit R into partnership for 1/4 share . Personal and Q decide to share future profits equally among themselves . Fill in the missing figure in the following journal entries :
Bank A/c .......Dr ------------
To premium for Goodwill A/c
(Being amount of goodwill brought in cash )
Premium for goodwill A/c ...Dr --------
To P's Capital A/c -----
To Q's Capital A/c 20000
(Being -----------------)
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Bank A/C. DR. 64000
To premium for goodwill. 64000
Premium for goodwill A/C Dr. 64000
To P's capital A/C. 28000
To Q's Capital A/C. 20000
WORKING NOTE:
(1) Q's share of goodwill :20,000
Total goodwill: 20000×16÷5= 64000
P's share of goodwill: 28000
(2) let the total share be 1
R's share 1/4
Remaining share 3/4
P's new share 7/12×3/4=7/16
Q's new share 5/12×3/4=5/16
R's share 1/4×4/4=4/16
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