Karam and Rhea are partners for equal shares. They admit Paras as partner for 1/3 share. Goodwill, on admission is valued at 2,40,000
Karam and Rhea are partners for equal shares. They admit Paras as partner for 1/3 share. Goodwill, on admission is valued at 2,40,000. Paras brings his share of Premium for Goodwill as follows: 50% by cheque, stock of 20,000 and he is unable to bring the balance amount.
Pass the Journal entry for the above.
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Solution:- 
Working Notes:
1. Calculation of Paras’s Share of Goodwill
Total Goodwill of the Firm: ₹2,40,000
Paras’s Share: 1/3
Paras’s Share of Goodwill: ₹ 2,40,000 x 1/3 = ₹80,000
2. Breakdown of Paras’s Contribution
Paras needs to bring ₹80,000. He contributes as follows:
50% by Cheque: ₹ 80,000 x 50% = ₹ 40,000 Stock: ₹20,000.
Balance Amount (Current Account): ₹ 80,000 – (40,000 + 20,000) = ₹ 20,000}:
Since he is unable to bring the remaining balance in cash, it is debited to his Capital/Current Account
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