(Profit at the end of year are given)P and S are partners sharing profit in the ratio of 3:2 . Their books showed at 20000 rupees ,R is admitted with 1/5 share which he acquires equally from P and S .R bring rupees 2000 as capital and rupees 10000 as his share of goodwill. Profit at the end of year were of the amount of rupees 100000.You are required to give journal entries to carry out the above arrangements.
Answers
Answer:
JOURNAL
1. A's Capital a/c.... Dr. 1200
B's Capital a/c.... Dr. 800
To Goodwill a/c 2000
(Being goodwill written off in the ratio of 3:2)
2. Cash a/c...... Dr. 10000
To C's Capital a/c 10000
(Being capital brought in by C)
3. C's Capital.... Dr. 3000
To A's Capital a/c 1800
To B's Capital a/c 1200
(Being C's share of goodwill charged to his capital account and distributed among the partners in the ratio of 3:2)
Answer:
A and B are partners sharing profits in the ratio of 3:2. Their books show goodwill at Rs.2,000. C is admitted with 1/4
th
share of profits and brings in Rs.10,000 as his capital but is not able to bring in cash for his share of goodwill Rs.3,000. Draft Journal entries.