Question

Anil and Sunil are partners in a firm with fixed capitals of Rs.3,20,000 and Rs.2,40,000 respectively. They admitted Charu as a new partner for 1/4th share in the profits of the firm on 1st April 2015.Charu brought Rs.3,20,000 as her share of capital. Calculate value of goodwill and record necessary Journal entries.

Answer 1

Working Notes :

Calculation of Hidden Goodwill

Total capital of the firm on the basis of charu's capital  =3,20,00 x 4/1 = 12,80,000

Less : Adjusted capitals of old partners + incoming partner's capital = ( 8,80,000) / 4,00,00