Question

Malathi and Shobana are partners sharing profits and losses in the ratio of 5 : 4. They admit Jayasri into partnership for 1/3 share of profit. Jayasri pays cash Rs. 6,000 towards her share of goodwill. The new ratio is 3 : 2 : 1. Pass necessary journal entry for adjusting goodwill on the assumption that the fixed capital method is followed.

Answer 1

Adjusting Goodwill =  Old share - New share

Malathi's share = 5/9 - 3/6 = (10 - 9)/18 = 1/18

Shobana's share = 4/9 - 2/6 = (8 - 6)/18 = 2/18