A and B were partners in a firm sharing profits in the ratio of 3:2. They decided to admit C and D as new partners . The new profit sharing ratio of will be 2:2:1:1. C and D bring rs. 2,75,000 each for their respective capitals and also amount of prem. for g/w in cash. G/w is valued at rs. 2,40,000 for the firm. Calculate the ratio of A and B and pass necessary journalentries.

Journal

 

Date

Particulars

L.F.

Debit

Amount

Rs

Credit

Amount

Rs

 

Cash A/c

Dr.

 

3,15,000

 

 

To C’s Capital A/c

 

 

 

2,75,000

 

To Premium for Goodwill A/c

 

 

 

40,000

 

(Amount of premium for goodwill and capital brought in by C)

 

 

 

 

 

 

 

 

 

 

 

Cash A/c

Dr.

 

3,15,000

 

 

To D’s capital A/c

 

 

 

2,75,000

 

To Premium for Goodwill A/c

 

 

 

40,000

 

(Amount of premium for goodwill and capital brought in by D)

 

 

 

 

 

 

 

 

 

 

 

Premium for Goodwill A/c

Dr.

 

80,000

 

 

To A’s capital A/c

 

 

 

64,000

 

To B’s capital A/c

 

 

 

16,000

 

(Premium for goodwill credited to the old partners in their sacrificing ratio)

 

 

 

 

 

 

 

 

 

 

       

 

Working Notes:

WN1

 

Value of Firm's Goodwill = Rs 2,40,000

 

WN2

 

Old Ratio (A and B) = 3 : 2

New Ratio (A, B, C and D) = 2 : 2 : 1 : 1

Sacrificing Ratio = Old Ratio – New Ratio

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