Question : A, B and C are in partnership sharing profits and losses in the ratio of 5: 4: 1. Two new partners D and E are admitted. Profits are to be shared in the ratio of 3: 4: 2: 2:1 respectively. D is to pay Rs. 30,000 for his share of goodwill but E is unable to pay for goodwill. Both the new partners introduced Rs. 40,000 each as their capital. Choose the correct option.
Option 1: Debiting Bank account 1,10,000 and crediting D’s capital account Rs 40,000 and E’s capital account Rs 40,000 and premium for goodwill account with Rs 30,000
Option 2: Debiting premium for goodwill account with Rs 30,000 and crediting A’s capital account with Rs 15,000 and B’s capital account with Rs 5000 and C’s capital account Rs 10,000
Option 3: Debiting premium for goodwill account Rs 30,000 and debiting c’s capital account 12,000 and E’s current account 15000 and crediting A’s capital account 45,000 and B’s capital account Rs 12,000
Option 4: Both 1 and 3
Correct Answer: Both 1 and 3
Solution : Answer = Both 1 and 3
Bank A/c Dr 1,10,000
D's Capital A/c 40,000
E's Capital A/c 40,000
Premium For Goodwill 30,000
C's Capital A/c Dr 12000
Premium for Goodwill A/c Dr 30,000
E's Current A/c Dr 15000
A's Capital A/c 45000
B's Capital A/c 12000 Hence, the correct option is 4.
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