Archives Answers

Answer

A and B are partners in a business sharing profits and losses in the ratio of 1/3rd and 2/3rd. On 1st April, 2022, their capitals were ₹ 8,000 and ₹ 10,000 respectively. On that date, they admit C in partnership and give him 1/4th share in the future profits. C brings ₹ 8,000 as his capital and ₹ 6,000 as goodwill. The amount of goodwill is withdrawn by the old partners in cash. Pass the Journal entries and show the capital accounts of all the partners. Calculate proportion in which partners would share profits and losses in future.

Solution:-

Ram and Mohan are partners in a firm sharing profits in the ratio of 3 : 2. on 1st April, they admit Sohan as a partner for 1/4th share in the profits. Sohan contributed following assets towards his capital and for his share of goodwill. Stock ₹ 60,000; Debtors ₹ 80,000; Land ₹ 1,00,000, Plant and Machinery ₹ 40,000. On the date of admission of Sohan, the goodwill of the firm was valued at ₹ 6,00,000. Pass necessary Journal entries in the books of the firm on Sohan’s admission if: i) Partners do not withdraw the share of goodwill. ii) Partners withdraw half of their share of goodwill.

Solution:-