Mahesh and Suresh were partners in a firm sharing profits

32 :- Mahesh and Suresh were partners in a firm sharing profits and losses in the ratio of 2 : 1. They decided to admit Nita into partnership with 1/4th share in the profits. Nita brought Rs 2,00,000 for her capital and the requisite amount of goodwill premium in cash. The goodwill of the firm is valued at Rs 12,00,000. The new profit sharing ratio of the partners is 2 : 1 : 1. Mahesh and Suresh withdraw their share of goodwill.
Pass necessary Journal entries in the books of the firm for the above transactions.

Solution :-

WORKING NOTES :-
(a) Calculation of sacrificing/gaining share of partners
Old ratio – new ratio
Mahesh = 2/3 – 2/4 = 2/12
Suresh = 1/3 – 1/4 = 1/12
Thus, sacrificing ratio of Mahesh and Suresh is 2:1

(b) Calculation of share of goodwill which is to be brought in by Nita
Nita’s share of goodwill = 12,00,000 x 1/4 = Rs 3,00,000