tal
withdrawn by
Q. 82. 4. Band C are partners in a firm sharing profits in the ratio of 3:2:1 with
Capitals of 70,000; 60,000 and 340,000 respectively. D is admitted in the firm for
th share in profits, which he acquires 1/8 th from A and 1/8 th from B. D brings in
160,000 as his capital and 32,000 for his share of goodwill in cash. 3/4th of the
amount of goodwill was withdrawn by A and B. The Capitals of the partners in the new
T
mare to be adjusted in profit sharing ratio on the basis of D's capital and excess or
deficit capital to be adjusted in cash.
Prepare recessary journal entries, Capital Accounts of the partners and Cash
Account
New Profit Sharing Ratio 9:5:4:6. Final Capitals A 390,000; B 350,000;
Cash
Answers
Answer:
1. Cash a/c.. Dr.21000
To Premium for goodwill a/c 21000
(Being Premium for goodwill brought in by C)
2. Premium for goodwill a/c. Dr.21000
To A's Capital a/c 9000
To B's Capital a/c 12000
(Being premium for goodwill brought in by C, distributed among the partners in the ratio 3:4)
Working Note:
A's old share= 3/5
B's old share= 2/5
C is admitted as a new partner.
A's sacrifice= 3/5 * 1/5
= 3/25
B's sacrifice= 2/5 * 2/5
= 4/25
Sacrificing ratio= 3:4
C's share= 3/25 + 4/25
= 7/25
Hence, C's share of goodwill= 7/25 * 75000
= 21000
Explanation: