X and Y are partners sharing profits in the ratio of 3 : 2. Goodwill appears in their balance sheet at ₹ 60,000. Z is admitted as a partner for 1/4th share in the profits. The total goodwill of the firm is valued at ₹ 2,00,000

X and Y are partners sharing profits in the ratio of 3 : 2. Goodwill appears in their balance sheet at ₹ 60,000. Z is admitted as a partner for 1/4th share in the profits. The total goodwill of the firm is valued at ₹ 2,00,000.

Pass journal entries if:

Z can not bring in cash his share of goodwill.

Z brings in cash his share of goodwill.

Hint. In both cases, goodwill appearing in the balance sheet at ₹ 60,000 will be written off between old partners in old ratio.