Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of...
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Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2. they admitted Ram for 1/4th share on 1st April, 2018. It was agreed that goodwill of the firm will be valued at 3 years purchase of the average profit of last 4 years which were Rs.50,000 for 2014-15, Rs.60,000 for 2015-16, Rs.90, 000 for 2016-17 and Rs.70, 000 for 2017-18. Ram did not bring his share of goodwill premium in cash. Record the necessary Journal entries in the books of the firm on Ram's admission when: (a) Goodwill appears in the books at Rs.2, 02, 500 (b) Goodwill appears in the books at Rs.2, 05,500. Mohan and Sohan were partners in a firm sharing profits and losses in the ratio of 3 : 2. they admitted Ram for 1/4th share on 1st April, 2018. It was agreed that goodwill of the firm will be valued at 3 years purchase of the average profit of last 4 years which were Rs.50,000 for 2014-15, Rs.60,000 for 2015-16, Rs.90, 000 for 2016-17 and Rs.70, 000 for 2017-18. Ram did not bring his share of goodwill premium in cash. Record the necessary Journal entries in the books of the firm on Ram's admission when: (a) Goodwill appears in the books at Rs.2, 02, 500 (b) Goodwill appears in the books at Rs.2, 05,500.
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Calculation of amount of goodwill Average profit 50000... View the full answer
Related Book For
Advanced Financial Accounting
ISBN: 978-0078025624
10th edition
Authors: Theodore E. Christensen, David M. Cottrell, Richard E. Baker
Posted Date:
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