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Question -

Amar and Samar were partners in a firm sharing profits and losses in 3:1 ratio. They admitted Kanwar for 1/4 share of profits. Kanwar could not bring his share of goodwill premium in cash. The Goodwill of the firm was valued at тВ╣. 80,000 on KanwarтАЩs admission. Record necessary journal entry for goodwill on KanwarтАЩs admission.



Answer -


┬а

Amar

:

Samar

Old Ratio

3

:

1
Kanwar admitted for 1/4 share of profit.

Journal Entries

Date

Particulars

L.F.

Debit Amount тВ╣

Credit Amount тВ╣

┬а

┬а

┬а

┬а

┬а

┬а

KanwarтАЩs┬аCapital A/c

Dr.

┬а

20,000

┬а

┬а

To┬аAmarтАЩs┬аCapital A/c

┬а

15,000

┬а

To SamarтАЩs Capital A/c

┬а

5,000

┬а

(KanwarтАЩs┬аshare of goodwill charged from his capital account by

Amar┬аand┬аKanwar┬аin sacrificing ratio)

┬а

┬а

┬а

┬а

┬а

┬а

┬а
New FirmтАЩs Goodwill = тВ╣ 80,000
KanwarтАЩs Share of Goodwill = 80,000 ├Ч (1/4) = 20,000
┬а
KanwarтАЩs Goodwill will be taken by Amar and Samar in their sacrificing ratio here. Sacrificing Ratio will be equal to old ratio because new and sacrificing ratio is not given, if sacrificing and new ratio is not given it is assumed that old partners sacrificed in their old ratio.

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