Mr. A commenced business with a capital of RS.2,50,000 on 1st April, 2013. During the five years ended 31st March, 2018, the following profits and losses were made:
`{:(31st"March"2014-"Loss " "RS.5,000",31st "March,2017"-"Profit " "RS.20,000"),(31st "March,2015-Profit RS.13,000","31stMarch,2018-Profit RS.25,000"),(31st "March, 2015-Profit" "RS.17,000",):}`
During this period he had drwan RS.40,000 for his personl use. On 1st April, 1st April, 2018, he admitted B into partnership on the following terms:
B to bring for his half share in the business, capital equal to A's Capital on 31 st March, 2018, he and to pay for the one-half share of goodwill of the business, on the basis of three times the average profit of the last five years. Prepare the statement showing what amount B should invest to become a partner and pass entries to record the transactions relating to admission.

Explanation

B will have to bring RS.2,80,000 as Capital and RS.21,000 for Goodwill.