Veena and Soma are partners in a firm. They admit Sara on 1st April, 2022 for 1/4th share in the profits of the firm. On an average, the profits earned by Veena and Soma are ₹ 21,000

Veena and Soma are partners in a firm. They admit Sara on 1st April, 2022 for 1/4th share in the profits of the firm. On an average, the profits earned by Veena and Soma are ₹ 21,000. The average capital employed by the firm is ₹ 1,50,000. The normal rate of return in the industry is 10%. It is decided to value goodwill on the basis of four year’s purchase of profits in excess of profits @ 10% on the money invested. You are required to:

i) Calculate the goodwill of the firm.

ii) Pass the Journal entries in the books of the firm if Sara brings into the firm her share of goodwill in cash.