1.

A and B are partners in a firm sharing profits and losses in the ratio of 3: 2. They decide to admit C into partnership with 14 share in profits. C will bring in Rs.30,000 for capital and the requisite amount of goodwill premium in cash. The goodwill of the firm is valued at Rs. 20,000. The new profit sharing ratio is 2 : 1: 1. A and B withdraw their share of goodwill. Given necessary journal entries.

Answer»

A and B are partners in a firm sharing profits and losses in the ratio of 3: 2. They decide to admit C into partnership with 14 share in profits. C will bring in Rs.30,000 for capital and the requisite amount of goodwill premium in cash. The goodwill of the firm is valued at Rs. 20,000. The new profit sharing ratio is 2 : 1: 1. A and B withdraw their share of goodwill. Given necessary journal entries.



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