1.

Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2 . They admitted Ram for 1/4th share on 1st April, 2018. It was agreed that goodwill of the firm will be valued at 3 years' purchase of the average profit of last 4 years which were ₹ 50,000 for 2014-15, ₹ 60,000 for 2015-16, ₹ 90,000 for 2016-17 and ₹ 70,000 for 2017-18. Ram did not bring his share of goodwill premium in cash. Record the necessary journal entries in the books of the firm on Ram's admission when:(a) Goodwill appears in the books at ₹ 2,02,500.(b) Goodwill appears in the books at ₹ 2,500.(c) Goodwill appears in the books at ₹ 2,02,000.

Answer» Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2 . They admitted Ram for 1/4th share on 1st April, 2018. It was agreed that goodwill of the firm will be valued at 3 years' purchase of the average profit of last 4 years which were ₹ 50,000 for 2014-15, ₹ 60,000 for 2015-16, ₹ 90,000 for 2016-17 and ₹ 70,000 for 2017-18. Ram did not bring his share of goodwill premium in cash. Record the necessary journal entries in the books of the firm on Ram's admission when:

(a) Goodwill appears in the books at ₹ 2,02,500.

(b) Goodwill appears in the books at ₹ 2,500.

(c) Goodwill appears in the books at ₹ 2,02,000.


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