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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A and B are partners in a business sharing profits and losses in the ratio of 1/3rd and 2/3rd. On 1st April, 2025, their capitals were ₹8,000 and ₹10,000 respectively. On that date, they admit C into partnership and give him a 1/4th share in the future profits. C brings ₹8,000 as his capital and ₹6,000 as goodwill. The amount of goodwill is withdrawn by the old partners in cash. Pass the Journal entries, show the Capital Accounts, and calculate the future profit-sharing ratio.
A and B keep their old shares, so they sacrifice in the old ratio 1 : 2.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| 2025 Apr 1 | Cash A/c Dr. | 14,000 | ||
| To C’s Capital A/c | 8,000 | |||
| To Premium for Goodwill A/c | 6,000 | |||
| Premium for Goodwill A/c Dr. | 6,000 | |||
| To A’s Capital A/c | 2,000 | |||
| To B’s Capital A/c | 4,000 | |||
| (Premium distributed in the sacrificing ratio 1 : 2) | ||||
| A’s Capital A/c Dr. | 2,000 | |||
| B’s Capital A/c Dr. | 4,000 | |||
| To Cash A/c | 6,000 | |||
| (Goodwill withdrawn by A and B) |
Partners’ Capital Accounts
| Particulars (Dr.) | A | B | C | Particulars (Cr.) | A | B | C |
|---|---|---|---|---|---|---|---|
| To Cash A/c (goodwill withdrawn) | 2,000 | 4,000 | – | By Balance b/d | 8,000 | 10,000 | – |
| To Balance c/d | 8,000 | 10,000 | 8,000 | By Cash A/c | – | – | 8,000 |
| By Premium for Goodwill A/c | 2,000 | 4,000 | – | ||||
| Total | 10,000 | 14,000 | 8,000 | Total | 10,000 | 14,000 | 8,000 |
New Ratio: A = 1/3 × 3/4 = 3/12; B = 2/3 × 3/4 = 6/12; C = 1/4 = 3/12 → 1 : 2 : 1.
Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "T.S. Grewal Class 12 Chapter 4 Q.30 - Admission of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Admission of a Partner.
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