Q6 X and Y partners in the firm sharing profits in the ratio of 4:3. Z is admitted for 1/4share.X
and Y decided to share equally in future. If z brought Rs. 14,000 as premium, it will be
credited to X and Y as:
(a) Rs.7000; Rs. 7000
(b) Rs.11,000; 3000
(c) Rs.8000; 6000
(d) None of these
Answers
Explanation:
Stock a/c.... Dr. 60000
Debtors a/c... Dr. 80000
Land a/c.... Dr. 100000
Plant and machinery a/c... Dr. 40000
To Z's Capital a/c 130000
To Premium for goodwill a/c 150000
(Being capital and premium for goodwill brought in by C in the form of assets)
2. Premium for Goodwill a/c.... Dr. 150000
To X's Capital a/c 90000
To Y's Capital a/c 60000
(Being premium for goodwill distributed among partners in the ratio of 3:2)
Working Note:
1. Calculation of Z's share of goodwill:
Z's share of Goodwill= 600000 * 1/4= 150000
Z's share of capital = 280000 - 150000 = 130000
2. Distribution of premium for goodwill:
X's share= 3/5 * 150000= 90000
Y's share= 2/5 * 150000= 60000