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?

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Solution

Books of Amar, Akbar and Anthony

Journal

Date

Particulars

L.F.

Amount

Rs

Amount

Rs

Anthony’s Capital A/c

Dr.

45,000

To Amar’s Capital A/c

11,250

To Akbar’s Capital A/c

33,750

(Adjustment of Anthony’s share of goodwill between

Amar and Akbar in sacrificing ratio)

Working Notes:

1) Sacrificing Ratio = Old Ratio − New Ratio

Sacrificing Ratio between Amar and Akbar = 1:3.

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Books of Amar, Akbar and Anthony Journal
Date	Particulars		L.F.	Amount Rs	Amount Rs
	Anthony’s Capital A/c	Dr.		45,000
	To Amar’s Capital A/c				11,250
	To Akbar’s Capital A/c				33,750
	(Adjustment of Anthony’s share of goodwill between Amar and Akbar in sacrificing ratio)