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