Question

Sam and Jose are partners in a firm sharing profits and losses in the ratio of 3 : 2. On 1^st April 2018, they admitted Joel as a partner. On the date of Joel’s admission, goodwill appeared in the books of the firm at ₹ 30,000. By assuming fluctuating capital method, pass the necessary journal entry if the partners decide to

1. write off the entire amount of existing goodwill
2. write off ₹ 20,000 of the existing goodwill.

Answer 1

(a) Write off the entire amount of existing goodwill

Journal Entry

Date	Particulars	L.F.	Debit ₹	Credit ₹
	Sam's Capital A/c .......Dr. Jose's Capital A/c .......Dr. To Goodwill A/c (Existing goodwill written off)		18,000 12,000 -	- - 30,000

(b) Write off ₹ 20,000 of the existing goodwill

Journal Entry

Date	Particulars	L.F.	Debit ₹	Credit ₹
	Sam's Capital A/c .......Dr. Jose's Capital A/c .......Dr. To Goodwill A/c (Existing goodwill of ₹ 20,000 extend written off)		12,000 8,000 -	- - 20,000