Question

Vaibhav and vibhor our partners sharing profit and losses in the ratio 2:1 admit Sumit into partnership and the new profit sharing ratio is 2:2:1 extract off balance sheet on admission of Sumit showed as follow :
Balance sheet:

Answer 1

Answer:

ANSWER

JOURNAL

1. A's Capital a/c.... Dr. 12000

B's Capital a/c.... Dr. 6000

To Goodwill a/c 18000

(Being goodwill written off in the ratio of 2:1)

2. Cash a/c.... Dr. 38000

To C's Capital a/c 30000

To Premium for Goodwill a/c 8000

(Being capital and part premium for goodwill brought in by C)

3. Premium for Goodwill a/c... Dr. 8000

C's Capital a/c.... Dr. 2000

To A's Capital a/c 6667

To B's Capital a/c 3333

(Being premium for goodwill distributed among the partners in the ratio of 2:1)

Working Note:

Distribution of premium for goodwill:

A's share= 10000 * 2/3= 6667

B's share= 10000 * 1/3= 3333

Explanation:

i hope it will help you.