It is about Goodwill- I would like to answer with working notes llustration 24ransactions in the books of the firm.

Here to use the goodwill which was not appear in the books. Journal Entries are given Below…

When the goodwill is llustration 24 A and B are partners in a firm sharing profits and losses in the ratio of 2:1 Their capital accounts as on 1" Jan 2016, were Rs.72,000 and Rs.44,000 respectively. They admit C as a partner for 1/5th share of future profits of the firm. C introduces Rs.25,000 as his share of capital but C is agreed to raise goodwill account for its full value in the books and not to show the value in books of the new firm. C's share of goodwill is Rs.7,500. You are asked to record the above ransactions in the books of the firm.

When the goodwill is llustration 24 A and B are partners in a firm sharing profits and losses in the ratio of 2:1 Their capital accounts as on 1" Jan 2016, were Rs.72,000 and Rs.44,000 respectively. They admit C as a partner for 1/5th share of future profits of the firm. C introduces Rs.25,000 as his share of capital but C is agreed to raise goodwill account for its full value in the books and not to show the value in books of the new firm. C's share of goodwill is Rs.7,500. You are asked to record the above ransactions in the books of the firm.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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