Solve this:
Priya and Riya were partners in a firm sharing profits in the ratio of 3:1.On 1st April 2015 they admitted Siya As new partner for 1/4th share in the profits of the firm.On the date of Siya's admission the balance sheet of Priya and Riya showed a General Reserve of Rs 80000, a debit balance of Rs 40000 in Profit and Loss A/c and Workmen Compensation Fund of Rs20000.

The following was agreed on Siya's admission.
i) Siya will bring Rs200,00 as her capital and the necessary amount of cash as premium for his share of goodwill.
ii) Goodwill of the firm is valued at Rs 80000.
iii) There was acclaim of Workmen compensation for Rs28000.
iv) The partners decided to share future profits in the ratio of 2:1:1.
Pass the necessary journal entries for the above on Siya's admission.

Dear Student
Date Particulars L.F. Debit
  General Reserve A/c Dr.   80,000  
    To Priya’s Capital A/c       60,000
    To Riya’s Capital A/c       20,000
  (Received General Reserve Transferred to Capital accounts)        
  Priya’s Capital A/c Dr.   30,000  
  Ria’s Capital A/c Dr.   10,000  
    To Profit & loss A/c       40,000
  (Being Profit and loss Transferred to capital account of old partners)        
  Workmen Compensation Fund A/c Dr.   20,000  
    To Revalution A/c       20,000
  (Being Fund Transferred to revalution account for payment of liability)        
  Ravalution A/c Dr.   28,000  
    To Claim of Workmen Compensation A/c       28,000
  (Being Claim of workmen compensation booked)        
  Bank A/c Dr.   40,000  
    To Siya’s Capital A/c       20,000
    To Premium For Goodwill A/c       20,000
  (Being Siya brought his share of goodwill and Capital)        
  Premium for Goodwill A/c Dr.   20,000  
    To Priya’s Capital A/c       20,000
  (Being Premium for goodwill credited to Priya for her Sacrificing Ratio)        
  Priya’s Capital A/c Dr.   6,000  
  Riya’s Capital A/c Dr.   2,000  
    To Revalution A/c       8,000
  (Being Revalution Loss transferred to old partners )        

Sacrificing Ratio of Priya and Riya    
Priya = Old Ratio - New Ratio 34-24 14
Riya = Old Ratio - New Ratio 14-14 0
Therefore only Priya is Sacrificing    
Goodwill distribution    
Chitra's share of Goodwill    20,000
Distribution in Sacrificing Ratio    
Priya   20,000


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