Anju and Manju are partners, sharing profits and losses in the proportion of 7 : 5. They agreed to admit Meenu, their manager, into partnership, who is to get one sixth share in the business

Anju and Manju are partners, sharing profits and losses in the proportion of 7 : 5. They agreed to admit Meenu, their manager, into partnership, who is to get one sixth share in the business. Meenu brings in ₹ 2,00,000 for her capital and ₹ 96,000 for 1/6th share of goodwill which she acquires 1/24th from Anju and 1/8th from Manu. The profit for the first year of the new partnership amount to ₹ 4,80,000.

Make the necessary Journal entries in connection with Meenu’s admission and divide the profit between the partners.

[Ans. New profit sharing Ratio 13 : 7 : 4; Profit : Anju ₹ 2,60,000; Manu ₹ 1,40,000 and Meenu ₹ 80,000.]