Question

A and B are partners in a firm, sharing profits in the ratio of 3 : 2. They admitted G as a new partner for 1/5th share in profits of the firm. C acquires his entire share from A. C brought in Rs 50,000 as his capital and Rs 10,000 as goodwill. On C’s admission goodwill appeared in the books of the firm at Rs 25,000. Record necessary journal

Answer 1

A’s Sacrifice = \(\frac{1}{5}\)

New profit of A \(=\frac{3}{5}-\frac{1}{5} \) = \(\frac{2}{5}\)