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Question
Amar and Akbar are equal partners in a firm. They admitted Anthony as a new partner and the new profit sharing ratio is 4:3:2. Anthony could not bring this share of goodwill Rs 45,000 in cash. It is decided to do adjustment for goodwill without opening goodwill account. Pass the necessary journal entry for the treatment of goodwill?
Solution
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Books of Amar, Akbar and Anthony Journal |
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Date |
Particulars |
L.F. |
Amount Rs |
Amount Rs |
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Anthony’s Capital A/c |
Dr. |
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45,000 |
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To Amar’s Capital A/c |
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11,250 |
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To Akbar’s Capital A/c |
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33,750 |
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(Adjustment of Anthony’s share of goodwill between Amar and Akbar in sacrificing ratio) |
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Working Notes:
1) Sacrificing Ratio = Old Ratio − New Ratio
Amar's sacrificing Ratio = `1/2 - 4/9 = [ 9 - 8]/18 = 1/18`
Akbar's sacrificing Ratio = `1/2 - 3/9 = [ 9 - 6]/18 = 3/18`
Sacrificing Ratio between Amar and Akbar = 1:3.
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RELATED QUESTIONS
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