A and B are partners sharing profits and losses in the ratio 2:1 C and D are admitted and - Accountancy - Reconstitution- Admission of a Partner

Question

A and B are partners sharing profits and losses in the ratio 2:1
C and D are admitted and new proftis sharing ratio becomes 4:2:3:1
Goodwill is valued at Rs 20,000 D brings requird goodwill and Rs
5000 cash for capital C brings in Rs 5000 cash and stock worth Rs
6000 as his capital in addition to the required amount of goodwill
in cash
Show the necessary journal entries in the books of the firm

Manas Kundra · Accepted Answer

Journal

Date

Particulars

L
F

Debit

Amount

Rs

Credit
Amount

Rs

Cash
A/c

Dr

18,000

Stock
A/c

Dr

6,000

To Premium on
Goodwill A/c

8,000

To
Câ€s Capital A/c

11,000

To
Dâ€s Capital A/c

5,000

(Cash and
stock brought in by the new partners C and D)

Working Notes

Total goodwill of firm = Rs 20,000

New Profit Sharing Ratio = 4:2:3:1

Journal
Date	Particulars		L.F.	Debit Amount Rs	Credit Amount Rs

	Cash A/c	Dr		18,000
	Stock A/c	Dr		6,000
	To Premium on Goodwill A/c				8,000
	To C”s Capital A/c				11,000
	To D”s Capital A/c				5,000
	(Cash and stock brought in by the new partners C and D)