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Saloni and Shrishti Were Partners in a Firm Sharing Profits in the Ratio of 7:3. Their Capitals Were Rs.2,00,000 and Rs.1,50,000 Respectively. They Admitted Aditi on 1st April, 2013 as a New Partner for 1/6th Share In Future Profits. - CBSE (Arts) Class 12 - Accountancy

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Question

Saloni and Shrishti were partners in a firm sharing profits in the ratio of 7:3. Their capitals were Rs.2,00,000 and Rs.1,50,000 respectively. They admitted Aditi on 1st April, 2013 as a new partner for 1/6th share in future profits. Aditi brought Rs.1,00,000 as her capital. Calculate the value of goodwill of the firm and record necessary journal entries for the above transaction on Aditi's admission.

Solution

Aditi is entered into partnership for 1/6th share in future profits and contributed capital Rs.1,00,000.

Calculating the firm's capital

Firm's Capital = New Partners' Capital x Reciprocal of her share i.e.. = 1,00,000 × 6 = Rs.6,00,000

However, the total capital as at that date is Rs.4,50,000 (i.e. 2,00,000 + 1,50,000 + 1,00,000)

Difference of 1,50,000 is hidden goodwill.

Aditi's share in goodwill = 1/6th of 1,50,000 = Rs.25,000

 

Journal

Date Particulars L.F. Debit (Rs.) Credit (Rs.)
 

Cash A/c                 Dr

          To Aditi’s Capital A/c

(Being capital brought on Aditi’s admission)

 

Aditi’s Capital A/c             Dr

           To Saloni’s Capital A/c

           To Shrishti’s Capital A/c

(Being goodwill distributed in sacrificing ratio of 7:3)

 

1,00,000

 

 

 

25,000

 

 

 

 

1,00,000

 

 

 

17,500

7,500

 

  Is there an error in this question or solution?
Solution Saloni and Shrishti Were Partners in a Firm Sharing Profits in the Ratio of 7:3. Their Capitals Were Rs.2,00,000 and Rs.1,50,000 Respectively. They Admitted Aditi on 1st April, 2013 as a New Partner for 1/6th Share In Future Profits. Concept: Admission of a Partner - Treatment of Goodwill.
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