Question

Disha and Divya are partners in a firm sharing profits in the ratio of 3 : 2 respectively. The fixed capital of Disha is ₹ 4,80,000 and of Divya is ₹ 3,00,000. On 1st April, 2019 they admitted Hina as a new partner for 1/5th share in future profits. Hina brought ₹ 3,00,000 as her capital. Calculate value of goodwill of the firm and record necessary Journal entries on Hina's admission.

Answer 1

Journal
Date	Particulars		L.F.	Debit Amount (₹)	Credit Amount (₹)
2019 April 1	Bank A/c	Dr.		3,00,000
	To Hina’s Capital A/c				3,00,000
	(Capital brought in by Hina)
April 1	Hina’s Current A/c	Dr.		84,000
	To Disha’s Current A/c				50,400
	To Divya’s Current A/c				33,600
	(Hina’s Share of Goodwill adjusted through current accounts)

Working Note:
Calculation of Hidden Goodwill
Total Capital of the firm on basis of Hina's Capital ( 3,00,000 x `5/1`)    = 15,00,000

Less : Adjusted Capital of old partners + Incoming partners Capital    = 10,80,000       

                                                                                                                =  4,20,000        

Hina's share of Goodwill : 4,20,000 x `1/5` = 84,000.