Question

E and F were partners in a firm sharing profits in the ratio of 3:1. They admitted G as a new partner on 1st March, 2015 for 1/3rd share. It was decided that E, F and G will share future profits equally G brought Rs.50,000 in cash and machinery worth Rs.70,000 for his share of profit as premium of goodwill Pass necessary Journal entries in the books of the firm.

Answer 1

Working Note :

1. Calculation of F'* share of gain in goodwill

G'* share of goodwill = 50,000 + 70,000 = Rs.1,20,00

Goodwill of the firm on the basis of G'* share = 1,20,000 x 3/1 = Rs.3,60,000

F'* share of gain in goodwill = 3,60,000 x 1/12 = Rs. 30,000