Question

Prepare a project on admission of a partner when there are 3 old partners. New partner capital is not given and has to be based upon old partners' finally adjusted capital. New partner brings only a part of his premium for goodwill in cash and there should be at least 10 items relating to revaluation of assets and liabilities including advance treatment of workmen compensation fund, Investment fluctuations fund, Provision for doubtful Debts
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PLEASE HELP ME WITH A QUESTION FOR MY PROJECT...ACCOUNTANCY CLASS 12​

Answer 1

Date Particulars Amount (Dr.) Amount (Cr.)
1. The new partner brings goodwill in cash Cash A/c Dr.
To Goodwill A/c Cr.
(Being share of goodwill of new partner brought in cash)
2. Old partners distribute Goodwill Goodwill A/c Dr.
To Old Partners Capital A/c (Individually) Cr.
(Being goodwill distributed among the old partners in their sacrificing ratio)

Answer 2

Answer:

1. Calculation of new profit sharing ratio : When a new partner is admitted , he acquires his share of profit from the old partners. This reduces the old partners' share of profits, hence the calculation of new profit sharing ratio becomes necessary