Question

R & S are partners sharing profits and losses in the ratio of 3:2. They admitted T into the firm. They have agreed to share the future profits – equally. T brought in Rs. 45,000 as his capital and Rs. 40,000 for his share of goodwill. The goodwill of the firm as in the books is Rs. 12,500. Write the journal entries.

Answer 1

Notes Sacrificing Ratio = Old ratio – New ratio Old ratio = 3:2 

New ratio = 1:1:1

R's sacrifice = \(\frac{3}{5} - \frac{1}{3} = \frac{9-5}{15} = \frac{4}{15}\)

S's sacrifice = \(\frac{2}{5}-\frac{1}{3} = \frac{6-5}{15} = \frac{1}{15}\)

S. Ratio = \(\frac{4}{15} : \frac{1}{15} = 4:1\)