In case of admission of a partner, suppose in the question it is only mentioned that the new partner is to bring in 30000 as his share of capital and the firm's goodwill is valued at Rs. 28000. His share in profits is 2/10. So his share of goodwill will be 5600. Here it is not mentioned whether he brought his share of goodwill in cash or not. So at the time of his admission, cash a/c will be debited by what amount? 30000 or 35600?
How will I know when I have to credit premium for goodwill a/c and when I have to credit new partner's capital a/c?

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Solution

Dear Student, as it not mentioned in the question (as porovided by you) that goodwill is brought in by new partner in cash therefore, adjusstment of goodwill must be done with New Partner's Capital/Current A/c.

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