Question

X and Y partners in the firm sharing profits in the ratio of 4:3. Z is admitted for 1/4share.X
and Y decided to share equally in future. If z brought Rs. 14,000 as premium, it will be
credited to X and Y as:
(a) Rs.7000; Rs. 7000
(b) Rs.11,000; 3000
(c) Rs.8000; 6000
(d) None of these​

Answer 1

Answer:

Explanation:

JOURNAL

1. Stock a/c....                                               Dr.          60000

  Debtors a/c...                                            Dr.          80000

  Land a/c....                                                Dr.           100000

  Plant and machinery a/c...                       Dr.            40000

               To Z's Capital a/c                                                    130000

               To Premium for goodwill a/c                                  150000

(Being capital and premium for goodwill brought in by C in the form of assets)

2. Premium for Goodwill a/c....                   Dr.             150000

                To X's Capital a/c                                                    90000

                 To Y's Capital a/c                                                    60000

(Being premium for goodwill distributed among partners in the ratio of 3:2)

Working Note:

1. Calculation of Z's share of goodwill:

Z's share of Goodwill= 600000 * 1/4= 150000

Z's share of capital = 280000 - 150000 = 130000

2. Distribution of premium for goodwill:

X's share= 3/5 * 150000= 90000

Y's share= 2/5 * 150000= 60000