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Record Necessary Journal Entries on Hina'S Admission. - Accountancy

Journal Entry

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.

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Solution

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.

Concept: Admission of a New Partner
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APPEARS IN

TS Grewal Class 12 Accountancy - Double Entry Book Keeping Volume 1
Chapter 5 Admission of a Partner
Exercise | Q 48 | Page 91
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