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Strong and Weak are partners sharing profits in the ratio of 2 : 3. On 1st April, 2020, they admit Able as partner for 1/4th share in profits. Able brought * 1,00,000 as his capital and36,000 as premium for goodwill for his 1/4th share in the profits. New profit-sharing ratioof Strong, Weak and Able is agreed to be 3:3:2. Strong and Weak withdraw the premiumfor goodwill. Pass necessary Journal entries. |
| Answer» STRONG : weak 2:3new PARTNER Able = 1/4first STEP :- calculate the sacrificing ratiosacrifice = old share - new share strong = 2/5 - 3/8 = 1/40weak = 3/5 - 3/8 = 9/40gain of able = 1/4sacrificing ratio = 1:9cash AC...... Dr 1,36,000 to Able's CAPITAL AC 1,00,000 to premium for goodwill 36,000premium for goodwill AC.... Dr. 36,000 to strong's capital AC 3,600 to weak's capital AC 32,400strong's capital AC....... Dr 3,600weak's capital AC......... Dr 32,400 to cash AC 36,000 | |