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Question -

Aditya and Balan are partners sharing profits and losses in 3:2 ratio. They admitted Christopher for 1/4 share in the profits. The new profit sharing ratio agreed was 2:1:1. Christopher brought ₹. 50,000 for his capital. His share of goodwill was agreed to at ₹. 15,000. Christopher could bring only ₹. 10,000 out of his share of goodwill. Record necessary journal entries in the books of the firm?



Answer -


Journal Entries

Date

Particulars

L.F.

Debit Amount ₹

Credit Amount ₹

 

Cash A/c

Dr.

 

60,000

 

 

To Christopher’s Capital A/c

 

50,000

 

To Premium for Goodwill A/c

 

10,000

 

(Amount of Capital and Premium for Goodwill brought by

Christopher)

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

10,000

 

 

Christopher’s Capital A/c

Dr.

 

5,000

 

 

To Adiya’s Capital A/c

 

6,000

 

To Balam’s Capital A/c

 

9,000

 

(Goodwill Christopher’s Share taken by Old Partner’s in

Sacrificing Ratio)

 

 

 

 

 

 

 
Sacrificing Ratio = Old Ratio − New Ratio

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