Hemant and Nishant were partners in a firm sharing profits in the ratio of 3 : 2. Their capitals were RS 1,60,000 and RS 1,00,000 respectively. They admitted Somesh on 1st April, 2013 as a new partner 1/5th share in the future porfits. Somesh brought RS 1,20,000 as his capital. Caluclate the value of goodwill of the firm and record necessary Journal entries for the above transctions on Somesh's admission.

Explanation

Based on Somesh's share, the Total Capital of the New Firm `(Rs 1,20,000xx5//1)` 6,00,000
`{:(,,RS.,),("Less":,"Capital of Hemant","1,60,000",),(,"Capital of Nishant","1,00,000",),(,"Capital of Somesh",underline"(1,20,000)",underline("3,80,1000")),(,"Value of Goodwill of the firm",,underlineunderline("2,20,000")):}`
Thus, Somesh's share of Goodwill `=RS2,20,000xx1/5 =RS 44,000`.