A and B are partners in a firm sharing 1 th share. C acquires 10 profits and losses in the ratio of 5 : 3. They admit C as a partner for his share from A and B in the ratio of 3 : 2. The goodwill of the firm has been valued at $10,000. C brings the necessary amount for his share of goodwill in cash. Pass the necessary journal entries under each of the following alternative cases: (i) When goodwill does not appear in the books and amount of goodwill is retained in firm. (ii) When goodwill already appears in the books at $8,000.

A and B are partners in a firm sharing 1 th share. C acquires 10 profits and losses in the ratio of 5 : 3. They admit C as a partner for his share from A and B in the ratio of 3 : 2. The goodwill of the firm has been valued at $10,000. C brings the necessary amount for his share of goodwill in cash. Pass the necessary journal entries under each of the following alternative cases: (i) When goodwill does not appear in the books and amount of goodwill is retained in firm. (ii) When goodwill already appears in the books at $8,000.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

A and B are partners in a firm sharing
1
th share. C acquires
10
profits and losses in the ratio of 5 : 3. They admit C as a partner for
his share from A and B in the ratio of 3 : 2. The goodwill of the firm has been valued at
$10,000. C brings the necessary amount for his share of goodwill in cash. Pass the
necessary journal entries under each of the following alternative cases:
(i) When goodwill does not appear in the books and amount of goodwill is retained
in firm.
(ii) When goodwill already appears in the books at $ 8,000.

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