20 :- Vimal and Nirmal are partners in a firm sharing profits and losses in the ratio of 3:2. A new partner Kailash is admitted. Vimal gives 1/5th of his share and Nirmal gives 2/5th of his share in favour of Kailash. For the purpose of Kailash’s admission, goodwill of the firm is valued at Rs 75,000 and Kailash brings his share of goodwill in cash which is retained in the business.
Journalise the above transactions.
Solution :-
WORKING NOTES :-
(a) Calculation of new ratio
Old ratio = 3:2
Kailash is admitted
Vimal = 3/5 – (3/5 x 1/5) = 3/5 -3/25 = 12/25
Nirmal = 2/5 – (2/5 x 2/5) = 2/5 – 4/25 = 6/25
Kailash = 3/25 + 4/25 = 7/25
Thus, their New ratio is 12:6:7
(b) Calculation of their sacrificing ratio
Vimal’s sacrifice = 3/25
Nirmal’s sacrifice = 4/25
Thus, their Sacrificing ratio is 3:4
(c) Calculation of partner’s goodwill share
Kailash’s share of goodwill = 75,000 x 7/25 = Rs 21,000
Vimal’s share = 21,000 x 3/7 = Rs 9,000
Nirmal’s share = 21,000 x 4/7 = Rs 12,000