Question

P & Q are partners sharing profits and losses in the ratio of 3:2. On 1^st Jan. 2012) they admitted ‘R’ into the firm. ‘R’ brought in Rs. 2,00,000 for his capital, but he was not in a position to bring his share of goodwill. The goodwill of the firm was valued at Rs. 3.0. 000. Existing goodwill in the book is for Rs. 6.0. 000. The new profit sharing ratio is 2:1:1. Pass necessary entries at the time of admission.

Answer 1

Sacrificing ratio = old ratio – new ratio

p' sacrifice = \(\frac{3}{5} - \frac{2}{4} = \frac{2}{20}\)

Q' sacrifice = \(\frac{2}{6} - \frac{1}{4}\) = \(\frac{3}{20}\)

R's ratio = \(\frac{1}{4}\)

Sacrificing ratio = 2 : 3

R's share of goodwill = 300000 \(\times\) 1/4 = 75000