1.

Singh and Sharma were partners in a firm sharing profit and losses in the ratio of 1:1 on 31-3-2019 their balance sheet was as follows ​

Answer»

1. Cash a/c ..                                                    Dr.            50000  Machinery a/c ...                                               Dr.            70000             To PREMIUM for goodwill a/c                                          120000(Being cash and machinery brought in by G for his SHARE of profit as premium for goodwill)2. Premium for Goodwill a/c ...                         Dr.              120000    F's Capital a/c ...                                            Dr.               30000              To E's Capital a/c                                                              150000(Being premium for goodwill and F's gain TRANSFERRED to E)Working Note:1. CALCULATION of sacrificing ratio:E's OLD ratio= 3/4F's old ratio= 1/4New ratio of firm after admission= 1:1:1Sacrificing ratio = Old ratio - New ratioE's sacrifice = 3/4- 1/3= 5/12F's gain = 1/4- 1/3= -1/122. Total goodwill of the firm= 120000*3/1= 360000F's gain= 360000 * 1/12= 30000



Discussion

No Comment Found

Related InterviewSolutions