Question

Shan and Manu are partners in a firm sharing profits and losses in the ratio of
3:2. They decide to admit Saji into partnership with 1/3 share in the profits. Saji
brings in Rs. 30,000 as her capital. She also promises to bring in the
necessary amount for her share of goodwill. On the date of admission, the
goodwill has been valued at Rs. 24,000 and the goodwill account already
appears in the books at Rs. 12,000. Saji brings in the necessary amount for
her share of goodwill and agrees that the existing goodwill account be written
off. Record the necessary journal entries in the books of the firm.​

Answer 1

Answer:

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Amount withdrawn by-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