Question

Q. 30. X and Y are partners sharing profits and losses in the ratio of 3 : 2. They
admit Z into partnership, Z paying a premium of 1,00,000 for 1/4 share of the profit
while X and Y as between themselves sharing profits and losses equally. Give journal entries​

Answer 1

At the time of admission of a new partner, goodwill brought in by new partner is distributed among old partner in their old ratio.

Goodwill brought in by new partner = Total goodwill of firm * C's share of profit

Goodwill brought in by new partner = Rs. 9600 * (1/4) = Rs. 2400

Goodwill brought in by C on his admission is distributed among A and B in their old ratio i.e., 3 : 2

Amount withdrawn by-

A = Rs. 2400 * (3/5) = 1440

B = Rs. 2400 * (2/5) = 960