Question

partners capital account p=90000 ,q=80000,r=70000 . partners current account p=10000,q=8000,r=5000(dr). general reserve = 60000 . Goodwill appearing in the book = 12000. investment=25000 . normal expected return =12%. avg profit =30000​

Answer 1

Answer:

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Answer 2

Explanation:

Working Note:

Calculation of hidden goodwill:

Total Capital of the firm after admission= 50000+50000+80000+40000

= 220000

Total capital of the firm based on Z's capital= 80000 * 4/1

= 320000

Hidden goodwill= 320000-220000= 100000

Z's share of Goodwill= 100000 * 1/4= 25000

JOURNAL

1. Cash a/c..... Dr. 80000

To Z's Capital a/c 80000

(Being capital brought in by Z)

2. Z's Capital a/c... Dr. 25000

To X's Capital a/c 12500

To Y's Capital a/c 12500

(Being Z's share of goodwill distributed among the partners in the ratio of 1:1)