Question

x and y are the partner in the firm they admitted z as a partner with 1/5th ratio share in profits of the firm z brings rs 400000 as is share of capital calculate the value of z share of a Goodwill on the basis of capital given that combined capital of x and y after all adjustment is RS 1000000​

Answer 1

Answer:

ACCOUNTANCY

X and Y are partners with capitals of Rs.50,000 each. They admit Z as a partner with 1/4

th

share in the profits of the firm. Z brings in Rs.80,000 as his share of capital. The Profit and Loss Account showed a credit balance of Rs.40,000 as on date of admission of Z.

Give necessary Journal entries to record the goodwill.

EASY

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ANSWER

Working Note:

Calculation of hidden goodwill:

Total Capital of the firm after admission= 50000+50000+80000+40000

= 220000

Total capital of the firm based on Z's capital= 80000 * 4/1

= 320000

Hidden goodwill= 320000-220000= 100000

Z's share of Goodwill= 100000 * 1/4= 25000

JOURNAL

1. Cash a/c..... Dr. 80000

To Z's Capital a/c 80000

(Being capital brought in by Z)

2. Z's Capital a/c... Dr. 25000

To X's Capital a/c 12500

To Y's Capital a/c 12500

(Being Z's share of goodwill distributed among the partners in the ratio of 1:1)

Answer 2

Answer:

yes upper answer is right