Question

X, Y and Z are equal partners with capitals of ₹ 1,500; ₹ 1,750 and ₹ 2,000 respectively. They agree to admit W into equal partnership upon payment in cash ₹ 1,500 for 1/4th share of the goodwill and ₹ 1,800 as his capital, both sums to remain in the business. The liabilities of the old firm amounted to ₹ 3,000 and the assets, apart from cash, consist of Motors ₹ 1,200, Furniture ₹ 400, Stock ₹ 2,650 and Debtors ₹ 3,780. The Motors and Furniture were revalued at ₹ 9450 and ₹ 380 respectively.
Pass journal entries to give effect to the above arrangement and also show Balance Sheet of the new firm.

Answer 1

Answer:

Some think that an equal relationship is when both partners make roughly the same amount of money. Others think equality means both partners share equally in doing the housework. ... Often concepts about equality come from some belief system and are imposed on the relationship by one partner or another.

Answer 2

Journal entries of the transactions is given below.

Explanation:

X’s capital = Rs. 1500,

Y’s capital = Rs. 1750,

Z’s capital = Rs. 2000

Sacrificing Ratio of X Y and Z = 1:1:1

Distribution of Premium for Goodwill

Goodwill amount distribution will be done as:

X’s share

$=1,500 \times \frac{1}{5}=300$

Y’s share

$=1,500 \times \frac{1}{5}=300$

Z’s share

$=1,500 \times \frac{1}{5}=300$

Distribution of loss Revaluation (Old Ratio)

Loss Evaluation will be calculated according to old ratio:

X’s share

$=270 \times \frac{1}{3}=90$

Y’s share

$=270 \times \frac{1}{3}=90$

Z’s share

$=270 \times \frac{1}{3}=90$