Question

Pass the Journal entry when a new partner fails to bring premium for Goodwill.​

Answer 1

Answer:

It can be done by various methods.

Method 1:

Transfer the goodwill amount to his Current Account. Say Rs 100 is to be brought by Mr C. And Mr A and Mr B are existing partners sharing profits equally

C's Current A/c Dr 100

To A's Capital a/c 50

To B's Capital A/c 50

Method 2:

Raise the goodwill in old ratio and write of the goodwill in new ratio(say good will is 120)

Raise 120 in 1:1

Goodwill a/c Dr 120

To A's Capital a/c 60

To B's Capital A/c 60

Write off 120 in 1:1:1

A's Capital ac Dr 40

B's Capital ac Dr 40

C's Capital ac Dr 40

To goodwill ac 120