Question

Ram and Shyam are partners sharing profit and loss in the ratio of 3:1. They admitted surender as a partner of 1/4 shares. His share of goodwill is rupees 18000. Give necessary journal entries if goodwill is received in cash and withdrawal by old partners​

Answer 1

Answer :

Journal entries (alternatively)

When new partner admitted and his share of goodwill was withdrawal by old partners

1) Cash a/c Dr

To Surender's Capital a/c

( New partner brings capital.)

2) Cash a/c Dr. 18000

To Ram's capital a/c. 13500

To Shyam's capital a/c. 4500

( Premium for goodwill transferred to old partners account in sacrificing ratio)

3) Ram's capital a/c Dr. 13500

Shyam's capital a/c Dr. 4500

To Cash a/c 18000

( full amount withdrawn by old partners)

The some Entries in alternative method :

1) Cash a/c Dr

To new partner's Capital a/c

(amount brought by new partner as goodwill)

2) New partners capital a/c Dr

To existing partners capital a/c (individually)

(goodwill is transferred to old partners account)

3) Existing partners capital a/c (individually)Dr.

To cash a/c.

(The amount of goodwill withdrawn by existing partners)