Aruna and Karuna were partners in a firm sharing profits and losses in the ratio of 3:2. They admitted Varuna as a partner for 3/7th share of the profit and the new profit-sharing ratio will be 2 : 2 : 3

Aruna and Karuna were partners in a firm sharing profits and losses in the ratio of 3:2. They admitted Varuna as a partner for 3/7th share of the profit and the new profit-sharing ratio will be 2 : 2 : 3. Varuna brought 2,00,000 as her capital and 1,50,000 as premium for goodwill. Half of their share of premium was withdrawn by Aruna and Karuna from the firm.

Calculate Sacrificing Ratio and pass necessary Journal entries for the above transactions in the books of the firm.

[Ans.: Sacrificing Ratio-11 : 4.]