A, B and C were partners in a firm sharing profits in the ratio of 2 : 1 : 2. Their respective fixed capitals were A ₹ 7,00,000; B ₹ 4,50,000 and C ₹ 6,00,000
A, B and C were partners in a firm sharing profits in the ratio of 2 : 1 : 2. Their respective fixed capitals were A ₹ 7,00,000; B ₹ 4,50,000 and C ₹ 6,00,000. On 31st March, 2022, they admitted Divya as a new parnter for 1/5th share in the profits. Their new profit sharing ratio was 1 : 2 : 1 : 1. Divya brought ₹ 5,00,000 as her capital and necessary amount for her share of goodwill premium.
Pass necessary journal entries for the above transactions in the books of the firm on Divya’s admission.
[Ans. Hidden Goodwill ₹ 2,50,000. Entry for premium for goodwill:
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