Question

Disha and Divya are partners in a firm sharing profits in the ratio of 3: 2 respectively. The fixed capital of Disha is Rs.4,80,000 and Rs.3,00,000. On 1.4.2015 they admitted Hina as a new partner for 1/5th share in future profits. Hina brought Rs.3, 00,000 as her capital. Calculate value of goodwill of the firm and record necessary Journal entries on Hina’s admission.

Answer 1

Working Note :

Calculation of hidden goodwill

Total capial of the firm on basis of hin's capital (3,00,000 x 5/1)

Less: Adjustment capital of old partners + incoming partners capital = 10,80,000/4,20,000