Kishor and Kunal were partners sharing profits and losses in the ratio of 5:3. On 1st April, 2026 they admitted Kushagra as a new partner and new ratio was decided as 3:2:1. Goodwill of the firm was valued as Rs. 18,00,000. Kushagra couldn't bring any amount for goodwill. The journal entry for the same would be:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → Kushagra's Current A/c Dr. Rs. 3,00,000, To Kishor's Capital A/c Rs. 2,25,000 and To Kunal's Capital A/c Rs. 75,000
When a new partner cannot bring his share of goodwill in cash, the amount is debited to his Current Account and credited to the old partners in their sacrificing ratio.
Kushagra's share of goodwill:
Kushagra's share = 1/6
Share of goodwill = Rs. 18,00,000 × 1/6 = Rs. 3,00,000
Sacrificing ratio (common denominator 24):
Kishor: old 5/8 = 15/24, new 3/6 = 12/24
Kishor's sacrifice = 15/24 − 12/24 = 3/24
Kunal: old 3/8 = 9/24, new 2/6 = 8/24
Kunal's sacrifice = 9/24 − 8/24 = 1/24
Sacrificing ratio = 3 : 1
Credit to each old partner:
Kishor = Rs. 3,00,000 × 3/4 = Rs. 2,25,000
Kunal = Rs. 3,00,000 × 1/4 = Rs. 75,000
Splitting the Rs. 3,00,000 in the old ratio 5 : 3 (Rs. 1,87,500 and Rs. 1,12,500) is the usual slip; the old ratio and the sacrificing ratio differ here.
NCERT (2026-27 edition): |