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Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner?
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Suresh and naresh are partners sharing profit in the ratio 3:2 they ad...
Journal entries for admission of Mahesh into partnership
Firstly, let's calculate the total profit and the share of each partner before the admission of Mahesh into the partnership.
Total profit = 3x + 2x = 5x
Suresh's share = 3x/5
Naresh's share = 2x/5
Now, Mahesh is admitted into the partnership for 1/6th share in the profit. So, his share of profit will be (1/6) x 5x = 5x/6
Case 1: Mahesh gets his share from Suresh
In this case, Suresh will give 3/5th of his share to Mahesh and will keep the remaining 2/5th share. The journal entry will be:
Cash A/c Dr. 18,000
To Goodwill A/c 18,000 (for the amount paid by Mahesh as goodwill)
Goodwill A/c Dr. 18,000
To Suresh A/c 10,800 (3/5th of his share)
To Naresh A/c 7,200 (2/5th of his share)
Mahesh A/c Dr. 5,000 (for his share of profit)
To Suresh A/c 3,000 (3/5th of his share)
To Mahesh A/c 2,000 (1/6th of the total profit)
Naresh A/c Dr. 3,333.33 (2/5th of his share)
To Mahesh A/c 833.33 (1/6th of the total profit)
To Naresh A/c 2,500 (2/5th of his share)
Case 2: Mahesh gets his share equally from old partners
In this case, both Suresh and Naresh will give 1/6th of their share to Mahesh. The journal entry will be:
Cash A/c Dr. 18,000
To Goodwill A/c 18,000 (for the amount paid by Mahesh as goodwill)
Goodwill A/c Dr. 18,000
To Suresh A/c 9,000 (1/6th of his share)
To Naresh A/c 9,000 (1/6th of his share)
Mahesh A/c Dr. 5,000 (for his share of profit)
To Suresh A/c 2,500 (1/6th of his share)
To Naresh A/c 2,500 (1/6th of his share)
Overall, it is important to note that goodwill is an intangible asset and cannot be withdrawn from the business as cash. It can only be transferred to the capital accounts of the partners.
Firstly, let's calculate the total profit and the share of each partner before the admission of Mahesh into the partnership.
Total profit = 3x + 2x = 5x
Suresh's share = 3x/5
Naresh's share = 2x/5
Now, Mahesh is admitted into the partnership for 1/6th share in the profit. So, his share of profit will be (1/6) x 5x = 5x/6
Case 1: Mahesh gets his share from Suresh
In this case, Suresh will give 3/5th of his share to Mahesh and will keep the remaining 2/5th share. The journal entry will be:
Cash A/c Dr. 18,000
To Goodwill A/c 18,000 (for the amount paid by Mahesh as goodwill)
Goodwill A/c Dr. 18,000
To Suresh A/c 10,800 (3/5th of his share)
To Naresh A/c 7,200 (2/5th of his share)
Mahesh A/c Dr. 5,000 (for his share of profit)
To Suresh A/c 3,000 (3/5th of his share)
To Mahesh A/c 2,000 (1/6th of the total profit)
Naresh A/c Dr. 3,333.33 (2/5th of his share)
To Mahesh A/c 833.33 (1/6th of the total profit)
To Naresh A/c 2,500 (2/5th of his share)
Case 2: Mahesh gets his share equally from old partners
In this case, both Suresh and Naresh will give 1/6th of their share to Mahesh. The journal entry will be:
Cash A/c Dr. 18,000
To Goodwill A/c 18,000 (for the amount paid by Mahesh as goodwill)
Goodwill A/c Dr. 18,000
To Suresh A/c 9,000 (1/6th of his share)
To Naresh A/c 9,000 (1/6th of his share)
Mahesh A/c Dr. 5,000 (for his share of profit)
To Suresh A/c 2,500 (1/6th of his share)
To Naresh A/c 2,500 (1/6th of his share)
Overall, it is important to note that goodwill is an intangible asset and cannot be withdrawn from the business as cash. It can only be transferred to the capital accounts of the partners.
Community Answer
Suresh and naresh are partners sharing profit in the ratio 3:2 they ad...
I 18000 ii suresh 9000 naresh 9000
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Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner?
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Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner?.
Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner? for Class 12 2024 is part of Class 12 preparation. The Question and answers have been prepared according to the Class 12 exam syllabus. Information about Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner? covers all topics & solutions for Class 12 2024 Exam. Find important definitions, questions, meanings, examples, exercises and tests below for Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner?.
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Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner?, a detailed solution for Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner? has been provided alongside types of Suresh and naresh are partners sharing profit in the ratio 3:2 they admit mahesh into partnership for 1/6th share in the profit who bring 18000 in cash for goodwill Pass journal entries the recording goodwill in the following cases assuming that the partners withdraw the goodwill from the business (1) if mahesh get his share from suresh (2) if mahesh get his share equally fromold partner? theory, EduRev gives you an
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