Question

Muskan and Manya were partners in a firm sharing profits and losses in the ratio of 7 : 3. Their capitals were Rs 2,00,000 and Rs 1,50,000 respectively. They admitted Anviksha on 1st April, 2018 as a new partner for $\frac{1}{6}$th share in future profits. Anvisksha brought Rs 1,00,000 as her capital. Calculate the value of goodwill of the firm on the basis of the new partners' share of profit. It was also given that profit on revaluation was Rs 10,000.

Answer 1

JOURNAL
$\begin{array}{ccccc}\text{Date}& \text{Particulars}& \text{L.F.}& \text{Debit}& \text{Credit}\\ & & & \left(\text{Rs}\right)& \left(\text{Rs}\right)\\ & \text{Bank A/c}\text{Dr.}& & 1,00,000& \\ & \text{To Anviksha's Capital A/c}& & & 1,00,000\\ & \underset{–}{\left(\text{Being capital brought in by Anviksha}\right)}& & & \\ & \text{Anviksha's Current A/c}\text{Dr.}& & 23,333& \\ & \text{To Muskan's Capital A/c}& & & 16,333\\ & \text{To Manya's Capital A/c}& & & 7,000\\ & (\text{Being goodwill of new partner distributed in sacrificing}& & & \\ & \text{ratio})& & & \end{array}$

Working Note:

Calculation of Hidden Goodwill:
Adjusted balance of old partners = Capital balance + Revaluation Profit

$=2,00,000+1,50,000+10,000=3,60,000$

New partner's capital = 1,00,000

Total capital of new firm = $1,00,000\times \frac{6}{1}=Rs6,00,000$

Total of adjusted capital + New partner's capital

$=3,60,000+1,00,000=Rs4,60,000$

Hidden Goodwill = $6,00,000-4,60,000=Rs1,40,000$

Anviksha's share of goodwill = $1,40,000\times \frac{1}{6}$

= Rs 23,333 (to be shared in sacrificing ratio 7:3)