60 Views

Question : A and B are partners sharing profits and losses in the ratio of 3: 2. They admit C into partnership for 1/4th share, which he takes 1/6th from A and 1/12th from B. Goodwill exists in the books at Rs. 20,000. C brings Rs. 18,000 as goodwill out of his share of Rs. 30,000. It was decided that the shortfall in amount shall be debited to C's Current Account. Choose the correct journal entry.

Option 1: Debiting A and B 's capital account with Rs 12,000 and Rs 8000 and Crediting goodwill account with Rs 20,000

Option 2: Debiting premium for Goodwill account Rs 18,000 and debiting C's current account with Rs 12,000 and crediting A with Rs 20,000 and B with Rs 10,000

Option 3: Both 1 and 2

Option 4: None of the above


Team Careers360 15th Jan, 2024
Answer (1)
Team Careers360 25th Jan, 2024

Correct Answer: Both 1 and 2


Solution : Answer = Both 1 and 2

A's Capital A/c Dr 12000

B's Capital A/c Dr 8000

To Goodwill - 20,000

(old ratio - 3:2)


Cash A/c Dr 18000

To Premium For Goodwill 18000

Premium for Goodwill A/c Dr 18000

C's Current A/c Dr 12000

To A's Capital A/c - 20,000

To B's Capital A/c - 10,000

(S. Ratio = 2:1)

Hence, the correct option is 3.

Related Questions

UPES Integrated LLB Admission...
Apply
Ranked #28 amongst Institutions in India by NIRF | Ranked #1 in India for Academic Reputation by QS University Rankings | 16.6 LPA Highest CTC
Jindal Global Law School Admi...
Apply
Ranked #1 Law School in India & South Asia by QS- World University Rankings | Merit cum means scholarships | Application Deadline: 30th Nov'24
Nirma University Law Admissio...
Apply
Grade 'A+' accredited by NAAC
Great Lakes PGPM & PGDM 2025
Apply
Admissions Open | Globally Recognized by AACSB (US) & AMBA (UK) | 17.3 LPA Avg. CTC for PGPM 2024 | Application Deadline: 1st Dec 2024
ICFAI Business School-IBSAT 2024
Apply
9 IBS Campuses | Scholarships Worth Rs 10 CR
UPES B.Tech Admissions 2025
Apply
Ranked #42 among Engineering colleges in India by NIRF | Highest CTC 50 LPA , 100% Placements
View All Application Forms

Download the Careers360 App on your Android phone

Regular exam updates, QnA, Predictors, College Applications & E-books now on your Mobile

150M+ Students
30,000+ Colleges
500+ Exams
1500+ E-books