A and B are partners in a firm, sharing Profits and Losses in the ratio of 3 : 2. Their capitals are Rs 1,80,000 and Rs 1,40,000 respectively. They admit X in partnership on the conditions that he will bring Rs 67,500 as goodwill and Rs 1,50,000 as capital and will get 14 share in the profits of the firm. Assuming that the capital and goodwill have been brought in cash by the new partner, pass the necessary journal entries and find out new profit sharing ratio of partners when (A) Goodwill is retained in the firm and (B) Goodwill is withdrawn by old partners.

A and B are partners in a firm, sharing Profits and Losses in the rati

1.	A and B are partners in a firm, sharing Profits and Losses in the ratio of 3 : 2. Their capitals are Rs 1,80,000 and Rs 1,40,000 respectively. They admit X in partnership on the conditions that he will bring Rs 67,500 as goodwill and Rs 1,50,000 as capital and will get 14 share in the profits of the firm. Assuming that the capital and goodwill have been brought in cash by the new partner, pass the necessary journal entries and find out new profit sharing ratio of partners when (A) Goodwill is retained in the firm and (B) Goodwill is withdrawn by old partners.
Answer» A and B are partners in a firm, sharing Profits and Losses in the ratio of 3 : 2. Their capitals are Rs 1,80,000 and Rs 1,40,000 respectively. They admit X in partnership on the conditions that he will bring Rs 67,500 as goodwill and Rs 1,50,000 as capital and will get $\frac{1}{4}$ share in the profits of the firm. Assuming that the capital and goodwill have been brought in cash by the new partner, pass the necessary journal entries and find out new profit sharing ratio of partners when (A) Goodwill is retained in the firm and (B) Goodwill is withdrawn by old partners.

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