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A and B sharing profit in ratio of two third and one third, agres toh admit c into partnership that he pays 30000 as capital and 9000 for one sixth share of goodwill which he acquires equally from A and B pass journal entries
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A and B sharing profit in ratio of two third and one third, agres toh...
Journal entries for Admission of a Partner
When a new partner is admitted into a partnership firm, the following journal entries are passed:
1. Revaluation of Assets and Liabilities
Before the admission of a new partner, it is necessary to revalue the assets and liabilities of the firm. The revaluation of assets and liabilities is required to adjust the value of assets and liabilities to their current market value. The journal entry for revaluation of assets and liabilities is as follows:
[Debit] Revaluation Account
[Credit] Assets/Liabilities Account
2. Adjustment of Capitals
After revaluation of assets and liabilities, the capitals of the existing partners are adjusted. The journal entry for adjustment of capitals is as follows:
[Debit] Capital Account of Old Partner A
[Debit] Capital Account of Old Partner B
[Credit] Revaluation Account
3. Admission of a New Partner
After the revaluation of assets and liabilities and adjustment of capitals, the new partner is admitted by bringing in his capital contribution. The journal entry for admission of a new partner is as follows:
[Debit] Cash/Bank Account
[Debit] Goodwill Account
[Credit] Capital Account of New Partner C
Note: Goodwill is calculated as the difference between the total value of the firm and the value of its net assets.
In the given case, the journal entries will be as follows:
1. Revaluation of Assets and Liabilities
[Debit] Revaluation Account - 30000
[Credit] Furniture Account - 10000
[Credit] Stock Account - 10000
[Credit] Building Account - 10000
2. Adjustment of Capitals
[Debit] Capital Account of Old Partner A - 20000
[Debit] Capital Account of Old Partner B - 10000
[Credit] Revaluation Account - 30000
3. Admission of a New Partner
[Debit] Cash/Bank Account - 30000
[Debit] Goodwill Account - 9000
[Credit] Capital Account of New Partner C - 39000
Note: Goodwill is calculated as (2/3 + 1/3) x 6 x 9000 = 54000. As C acquires only one-sixth share of goodwill, he pays 1/6 x 54000 = 9000.
When a new partner is admitted into a partnership firm, the following journal entries are passed:
1. Revaluation of Assets and Liabilities
Before the admission of a new partner, it is necessary to revalue the assets and liabilities of the firm. The revaluation of assets and liabilities is required to adjust the value of assets and liabilities to their current market value. The journal entry for revaluation of assets and liabilities is as follows:
[Debit] Revaluation Account
[Credit] Assets/Liabilities Account
2. Adjustment of Capitals
After revaluation of assets and liabilities, the capitals of the existing partners are adjusted. The journal entry for adjustment of capitals is as follows:
[Debit] Capital Account of Old Partner A
[Debit] Capital Account of Old Partner B
[Credit] Revaluation Account
3. Admission of a New Partner
After the revaluation of assets and liabilities and adjustment of capitals, the new partner is admitted by bringing in his capital contribution. The journal entry for admission of a new partner is as follows:
[Debit] Cash/Bank Account
[Debit] Goodwill Account
[Credit] Capital Account of New Partner C
Note: Goodwill is calculated as the difference between the total value of the firm and the value of its net assets.
In the given case, the journal entries will be as follows:
1. Revaluation of Assets and Liabilities
[Debit] Revaluation Account - 30000
[Credit] Furniture Account - 10000
[Credit] Stock Account - 10000
[Credit] Building Account - 10000
2. Adjustment of Capitals
[Debit] Capital Account of Old Partner A - 20000
[Debit] Capital Account of Old Partner B - 10000
[Credit] Revaluation Account - 30000
3. Admission of a New Partner
[Debit] Cash/Bank Account - 30000
[Debit] Goodwill Account - 9000
[Credit] Capital Account of New Partner C - 39000
Note: Goodwill is calculated as (2/3 + 1/3) x 6 x 9000 = 54000. As C acquires only one-sixth share of goodwill, he pays 1/6 x 54000 = 9000.
Community Answer
A and B sharing profit in ratio of two third and one third, agres toh...
1.bank account dr by 39000 and c 's capital acount cr by 30000and premium for goodwill by 9000
2 . premium for goodwill dr by 9000 A's and B's capiatls are cr by 4500 and 45000 respectively
2 . premium for goodwill dr by 9000 A's and B's capiatls are cr by 4500 and 45000 respectively
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A and B sharing profit in ratio of two third and one third, agres toh admit c into partnership that he pays 30000 as capital and 9000 for one sixth share of goodwill which he acquires equally from A and B pass journal entries Related: NCERT Solutions - Chapter 3 - Admission of a Partner-3, Partnership Account, Class 12, Accountancy
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Solutions for A and B sharing profit in ratio of two third and one third, agres toh admit c into partnership that he pays 30000 as capital and 9000 for one sixth share of goodwill which he acquires equally from A and B pass journal entries Related: NCERT Solutions - Chapter 3 - Admission of a Partner-3, Partnership Account, Class 12, Accountancy in English & in Hindi are available as part of our courses for Commerce.
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