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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
Asin and Shreyas are partners in a firm. They admit Ajay as a new partner with a 1/5th share in the profits. Ajay brings ₹5,00,000 as his share of capital. The value of the total assets of the firm was ₹15,00,000 and outside liabilities were valued at ₹5,00,000 on that date. Give the necessary Journal entry to record goodwill at the time of Ajay’s admission. Show your workings.
Capitalised value of the firm = ₹5,00,000 × 5/1 = ₹25,00,000.
Net worth of the new firm = (Total Assets – Outside Liabilities) + Ajay’s capital = (₹15,00,000 – ₹5,00,000) + ₹5,00,000 = ₹15,00,000.
Goodwill = ₹25,00,000 – ₹15,00,000 = ₹10,00,000; Ajay’s share = ₹10,00,000 × 1/5 = ₹2,00,000 (sacrificing ratio 1 : 1).
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Ajay’s Capital A/c Dr. | 2,00,000 | |||
| To Asin’s Capital A/c | 1,00,000 | |||
| To Shreyas’s Capital A/c | 1,00,000 | |||
| (Ajay’s share of goodwill adjusted, credited in the sacrificing ratio 1 : 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.41 - Admission of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 4 - Admission of a Partner.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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