A and B are partners sharing profits in the ratio of 3 : 2. They admit C into the firm for 3/7th profits (which he takes 2/7th from A and 1/7th from B) and brings ₹ 6,00,000 as premium out of his share of ₹ 7,20,000

A and B are partners sharing profits in the ratio of 3 : 2. They admit C into the firm for 3/7th profits (which he takes 2/7th from A and 1/7th from B) and brings ₹ 6,00,000 as premium out of his share of ₹ 7,20,000. Goodwill account does not appear in the books of A and B.

Hint. Premium for Goodwill A/c will be debited by ₹ 6,00,000 and Current Account of C will be debited by ₹ 1,20,000 and Capital Accounts of A and B will be credited by ₹ 4,80,000 and ₹ 2,40,000 respectively.