Adil and Bhavya are partners sharing profits and losses in the

25 :- Adil and Bhavya are partners sharing profits and losses in the ratio of 7:5. They admit Kamal, their Manager, into partnership who is to get 1/6^th share in the business. Kamal brings Rs 1,00,000 for his capital and Rs 36,000 for the 1/6^th share of goodwill which he acquires 1/24^th from Adil and 1/8^th from Bhavya. Profits for the first year of the new partnership was Rs 2,40,000.
Pass necessary journal entries for Kamal’s admission and appropriation the profits between the partners.

Solution :-

WORKING NOTES :-
(a) Calculation of New profit sharing ratio
Aadil’s new share = 7/12 – 1/24 = 13/24
Bhavya’s new share = 5/12 – 1/8 = 7/24
Kamal’s share = 1/6 x 4/4 = 4/24
Thus, New PSR of Adil, Bhavya and Kamal is 13:7:4

(b) Calculation of Sacrificing share of Aadil and Bhavya
Aadil = 7/12 – 13/24 = 1/24
Bhavya = 5/12 – 7/24 = 3/24

(c) Calculation of their share of goodwill
Aadil’s share of goodwill = 36,000 x 1/4 = Rs 9,000
Bhavya’s share of goodwill = 36,000 x 3/4 = Rs 27,000