# Pass Necessary Journal Entries. - Accountancy

Journal Entry

A and B are partners in a firm sharing profits and losses in the ratio of 3 : 2. They admit C into partnership for 1/5th share. C brings ₹ 30,000 as capital and ₹ 10,000 as goodwill. At the time of admission of C, goodwill appeared in the Balance Sheet of A and B at ₹ 3,000. New profit-sharing ratio of the partners will be 5 : 3 : 2. Pass necessary Journal entries.

#### Solution

 Journal Entries Date Particulars L.F. Debit Amount Rs Credit Amount Rs A’s Capital A/c Dr. 1,800 B’s Capital A/c Dr. 1,200 To Goodwill A/c 3,000 (Goodwill written-off) Cash A/c Dr. 40,000 To C’s Capital A/c Dr. 30,000 To Premium for Goodwill A/c 10,000 (C brought capital and his share of goodwill in cash) Premium for Goodwill Dr. 10,000 To A’s Capital A/c 5,000 To B’s Capital A/c 5,000 (Premium for Goodwill distributed)

Old Ratio = A : B
= 3 : 2
New Ratio = A : B : C
= 5 : 3 : 2
Sacrificing Ratio = Old Ratio − New Ratio
A's = 3/5 - 5/10 = 1/10

B's = 2/5 - 3/10 = 1/10

Sacrificing Ratio = A : B
= 1/10 : 1/10 = 1 : 1
Distribution of Premium for Goodwill C’s share of Goodwill)
A and B each will get = 10,000 x 1/2 = Rs. 5,000 each

Goodwill written-off :
A will be debited by 3,000 x 3/5 = Rs. 1,800.
B will be credited by 3,000 x 2/5 = Rs. 1,200.

Is there an error in this question or solution?

#### APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1
Chapter 5 Admission of a Partner
Exercise | Q 29 | Page 88