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Goodwill is valued 40 000 and rohan is to bring in the necessary amount in cash as premium for goodwil and 60000 as capital for 1 forth share show working note of admission of a partner?
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Goodwill is valued 40 000 and rohan is to bring in the necessary amoun...
Goodwill is valued 49000 and rani is to bring in the necessary amount in cash as premiums for goodwill and 80000as capital for 1forth share show working not e of admission of a partner
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Goodwill is valued 40 000 and rohan is to bring in the necessary amoun...
Admission of a Partner
Admission of a partner involves the introduction of a new partner into an existing partnership firm. In this case, Rohan is joining the partnership and bringing in cash for goodwill and capital.
Calculation of Premium for Goodwill
Goodwill is valued at $40,000. Since Rohan is joining for a 1/4th share, the premium for goodwill will be calculated as follows:
Goodwill = Goodwill Value / Total number of partners
Goodwill = $40,000 / 4
Goodwill = $10,000
Calculation of Capital Contribution
Rohan is also required to bring in $60,000 as capital for his 1/4th share in the partnership.
Journal Entry for Admission of Rohan
The journal entry for Rohan's admission will be as follows:
- Cash A/c Dr. (Goodwill) $10,000
- Cash A/c Dr. (Capital) $60,000
- To Rohan's Capital A/c $70,000
Explanation
- Rohan is bringing in $10,000 as premium for goodwill and $60,000 as capital, totaling $70,000 for his 1/4th share in the partnership.
- This transaction increases the total capital of the partnership and Rohan's capital account is credited with $70,000.
- The cash and goodwill accounts are debited to reflect the increase in assets and the payment made by Rohan for his admission.
In conclusion, the admission of a new partner involves the calculation of goodwill premium and capital contribution, which are recorded in the books of accounts through appropriate journal entries.
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Goodwill is valued 40 000 and rohan is to bring in the necessary amount in cash as premium for goodwil and 60000 as capital for 1 forth share show working note of admission of a partner?
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Goodwill is valued 40 000 and rohan is to bring in the necessary amount in cash as premium for goodwil and 60000 as capital for 1 forth share show working note of admission of a partner? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Goodwill is valued 40 000 and rohan is to bring in the necessary amount in cash as premium for goodwil and 60000 as capital for 1 forth share show working note of admission of a partner? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goodwill is valued 40 000 and rohan is to bring in the necessary amount in cash as premium for goodwil and 60000 as capital for 1 forth share show working note of admission of a partner?.
Goodwill is valued 40 000 and rohan is to bring in the necessary amount in cash as premium for goodwil and 60000 as capital for 1 forth share show working note of admission of a partner? for Commerce 2024 is part of Commerce preparation. The Question and answers have been prepared according to the Commerce exam syllabus. Information about Goodwill is valued 40 000 and rohan is to bring in the necessary amount in cash as premium for goodwil and 60000 as capital for 1 forth share show working note of admission of a partner? covers all topics & solutions for Commerce 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Goodwill is valued 40 000 and rohan is to bring in the necessary amount in cash as premium for goodwil and 60000 as capital for 1 forth share show working note of admission of a partner?.
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