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A and b are partners sharing profits equally they admit c into partnership who brings 20000 as goodwill for 1/5th share of profits what shall be journal enteries if no goodwill exists in the books of the firm |
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Answer» Answer: Old ratio =1:1 c share= 1/5 let =1 remained=1-1/5=5-1/5 =4/5 a NEW ratio =1/2*4/5 =4/10 bnew ratio= 1/2*4/5 =4/10 4/10 :4/10:4/5 = 4:4:8/10 = 1:1:2 cshare of goodwill = 20000*1/5= 4000 a capital a/c DR. 2000B capital a/c dr.2000 To c capital a/c 4000 |
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