Admission Of A New Partner

Admission Of New Partner

(When An Existing Partner also Gains on Admission of New Partner). Ram and Shyam are partnres sharing profits and losses in the ratio of 4:1. They admit Mohan into the partnership on 1st April, 2019 for 1/3rd share in porfits. It was agreed that Ram, Shayam and Mohan would share profits equally in future. Mohan brought in RS 50,000 as goodwill for his 1/3rd share in porfits. Pass necessary Journal entries in the books of the firm.

Given below is the Balance Sheet of A and B, who are carrying on partnership business as on March 31,2017. A and B share profits in the ratio of 2:1. C is admitted as a partner on the date of the balance sheet on the following terms: 1. C will bring in Rs 1,00,000 as his capital and Rs 60,000 as his share of goodwill for 1/4 share in profits. 2. Plant is to be appreciated to Rs 1,20,000 and the value of buildings is to be appreciated by 10%. 3. Stock is found overvalued by Rs 4,000. 4. A provision for doubtful debts is to be created at 5% of debtors. 5. Creditors were unrecorded to the extend of Rs 1,000. Record revaluation Account, partners’ capital accounts, and the Balance Sheet of the constituted firm after admission of the new partner.

In case of admission of a partner, the entry for unrecorded investments will be: