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Question -

Arti and Bharti are partners in a firm sharing profits in 3:2 ratio, they admitted Sarthi for 1/4 share in the profits of the firm. Sarthi brings ₹. 50,000 for his capital and ₹. 10,000 for his 1/4 share of goodwill. Goodwill already appears in the books of Arti and Bharti at ₹. 5,000. the new profit sharing ratio between Arti, Bharti and Sarthi will be 2:1:1. Record the necessary journal entries in the books of the new firm?



Answer -


Journal Entries

Date

Particulars

L.F.

Debit Amount ₹

Credit Amount ₹

 

 

 

 

 

 

Arti’s Capital A/c

Dr.

 

3,000

 

 

Bharti’s Capital A/c

Dr.

 

2,000

 

 

To Goodwill A/c

 

5,000

 

(Goodwill written off)

 

 

 

 

 

 

Cash A/c

Dr.

 

60,000

 

 

To Sarthi’s Capital A/c

 

50,000

 

To Premium for Goodwill A/c

 

10,000

 

(Amount of capital and share of goodwill brought by Sarthi)

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

10,000

 

 

To Arti’s Capital A/c

 

4,000

To Bharti’s Capital A/c

6,000

 

(Premium for Goodwill credited Arti’s Capital Account)

 

 

 

 

 

 

 

 

 


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