Question

Arti and Bharti are partners in a firm sharing profits in 3:2 ratio, They admitted Sarthi for 1/4 share in the profits of the firm. Sarthi brings Rs. 50,000 for his capital and Rs. 10,000 for his 1/4 share of goodwill. Goodwill already appears in the books of Arti and Bharti at Rs. 5,000. the new profit sharing ratio between Arti, Bharti and Sarthi will be 2:1:1. Record the necessary journal entries in the books of the new firm?

Answer 1

Journal Entries
Date	Particulars			L.F.	Debit Amount Rs	Credit Amount Rs
	Arti's Capital A/c		Dr.		3,000
	Bharti's Capital A/c		Dr.		2,000
	To Goodwill A/c					5,000
	(Goodwill written off)
	Cash A/c		Dr.		60,000
	To Sarthi's Capital A/c					50,000
	To Premium for Goodwill A/c					10,000
	(Amount of capital and share of goodwill brought by Sarthi)
	Premium for Goodwill A/c		Dr.		10,000
	To Arti's Capital A/c					4,000
	To Bharti’s Capital A/c					6,000
	(Premium for Goodwill credited Arti's Capital Account)

Sarthi admitted for share in new firm.

Sacrificing Ratio = Old Ratio − New Ratio

Arti will receive

Bharti will receive