Ramesh, Mahesh and Suresh were partners in a firm sharing profits in the ratio of 3 : 3 : 2. Their respective fixed capitals were : Ramesh Rs. 5,00,000; Mahesh Rs. 4,00,000 and Suresh Rs. 3,00,000. They admitted Govind as a new partner for 1/5th share in the profits. Govind brought Rs. 4,00,000 as his capital and the necessary amount for goodwill premium. Their new profit sharing ratio will be 2 : 1 : 1 : 1. Calculate the value of goodwill of the firm, showing your workings clearly. Pass necessary journal entries for the above transactions on Govind’s admission.
Ramesh, Mahesh and Suresh were partners in a firm sharing profits in the ratio of 3 : 3 : 2. Their respective fixed capitals were : Ramesh Rs. 5,00,000; Mahesh Rs. 4,00,000 and Suresh Rs. 3,00,000. They admitted Govind as a new partner for 1/5th share in the profits. Govind brought Rs. 4,00,000 as his capital and the necessary amount for goodwill premium. Their new profit sharing ratio will be 2 : 1 : 1 : 1. Calculate the value of goodwill of the firm, showing your workings clearly. Pass necessary journal entries for the above transactions on Govind’s admission.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ramesh, Mahesh and Suresh were partners in a firm sharing profits in the ratio of 3 : 3 : 2. Their respective fixed capitals were : Ramesh Rs. 5,00,000; Mahesh Rs. 4,00,000 and Suresh Rs. 3,00,000. They admitted Govind as a new partner for 1/5th share in the profits. Govind brought Rs. 4,00,000 as his capital and the necessary amount for
Calculate the value of goodwill of the firm, showing your workings clearly. Pass necessary
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