Janak, Chaman, and Anmol are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decide to change their profit sharing ratio to 2 : 2 : 1. To give effect to this new profit sharing ratio, they decided to value goodwill at ₹ 60,000.
Janak, Chaman, and Anmol are partners sharing profits and losses in the ratio of 3 : 2 : 1. They decide to change their profit sharing ratio to 2 : 2 : 1. To give effect to this new profit sharing ratio, they decided to value goodwill at ₹ 60,000.
What will be the necessary Journal entry if goodwill does not appear in the old Balance Sheet and it is not raised and written off?
a)
Chaman’s Capital A/c Dr. ₹ 4,000
Anmol’s Capital A/c Dr. ₹ 2,000
To Janak’s Capital A/c ₹ 6,000
b)
Goodwill A/c Dr. ₹ 60,000
To Janak’s Capital A/c ₹ 30,000
To Chaman’s Capital A/c ₹ 20,000
To Anmol’s Capital A/c ₹ 10,000
c)
Janak’s Capital A/c Dr. ₹ 24,000
Chaman’s Capital A/c Dr. ₹ 24,000
Anmol’s Capital A/c Dr. ₹ 12,000
To Goodwill A/c ₹ 60,000
d)
Janak’s Capital A/c Dr. ₹ 6,000
To Chaman’s Capital A/c ₹ 4,000
To Anmol’s Capital A/c ₹ 2,000
Anurag Pathak Changed status to publish May 7, 2023
Ans – a)
Solution:-
Calculation of Sacrifice/gain of the partners
Old Ratio = 3 : 2 : 1
New Ratio = 2 : 2 : 1
Janak = 3/6 – 2/5 = 15 – 12/30 = 3/30 (sacrifice)
Chaman = 2/6 – 2/5 = 10 – 12/30 = – 2/30 (gain)
Anmol = 1/6 – 1/5 = 5 – 6/30 = – 1/30 (gain)
Partner’s Share in Goodwill
Goodwill of the firm = 60,000
Janak’s share in goodwill = 60,000 × 3/30 = ₹ 6,000 (Credit)
Chaman’s share in goodwill = 60,000 × 2/30 = ₹ 4,000 (Debit)
Anmol’s share in goodwill = 60,000 × 1/30 = ₹ 2,000 (Debit)
Adjusting Entry of Goodwill
Chaman’s Capital A/c ₹ 4,000
Anmols’s Capital A/c ₹ 2,000
To Janak’s Capital A/c Dr. ₹ 6,000
Anurag Pathak Changed status to publish May 12, 2023
