Question

Aditya and Balan are partners sharing profits and losses in 3:2 ratio. They admitted Christopher for 1/4 share in the profits. The new profit sharing ratio agreed was 2:1:1. Christopher brought Rs. 50,000 for his capital. His share of goodwill was agreed to at Rs. 15,000. Christopher could bring only Rs. 10,000 out of his share of goodwill. Record necessary journal entries in the books of the firm?

Accepted Answer

[object Object] — The solution is derived from the principles illustrated in the provided context. Question 20 confirms the calculation of the sacrificing ratio for partners Aditya and Balan (Old Ratio 3:2, New Ratio 2:1:1), resulting in a sacrificing ratio of 2:3. The treatment of the goodwill deficiency follows the logic in Questions 25 and 26, where the amount not brought in cash is adjusted through the incoming partner's capital account. Since Christopher brought only Rs. 10,000 out of Rs. 15,000, the remaining Rs. 5,000 is debited to his Capital A/c.

Date	Particulars	L.F.	Debit (Rs.)
	Bank A/c Dr.
To Christopher’s Capital A/c
(Being capital brought in by Christopher)		50,000	50,000
	Bank A/c Dr.
Christopher’s Capital A/c Dr.
To Premium for Goodwill A/c
(Being goodwill premium brought in cash and balance charged from capital)		10,000
5,000	15,000
	Premium for Goodwill A/c Dr.
To Aditya’s Capital A/c
To Balan’s Capital A/c
(Being premium for goodwill distributed in sacrificing ratio)		15,000	6,000
9,000

Explanation

Solution Steps