Q. 20. X and Yare partners sharing profits in the ratio of 4 : 3. Z joins partnership
for2/7th share in the profits (of which he acquires 314th from X and 1/4th from Y).
Z brings in for his capital and for goodwill. Half of the amount
ofgoodwill is withdrawn by the old partners.
Pass necessary Journal entries and find out new profit sharing ratio.
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bank a/c dr.
To z's capital a/c
To premium for goodwill a/c
preemium for goodwill a/c dr.
to x capital a/c
to y capital a/c
new ratio
x= 4/7-(3/4*2/7)=5/14
y=3/7-(1/4*2/7)=5/14
z=2/7=4/14
new=x:y:z=5:5:4
To z's capital a/c
To premium for goodwill a/c
preemium for goodwill a/c dr.
to x capital a/c
to y capital a/c
new ratio
x= 4/7-(3/4*2/7)=5/14
y=3/7-(1/4*2/7)=5/14
z=2/7=4/14
new=x:y:z=5:5:4
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