Vikas and Rahul are partners who shared profits in the ratio of 2 : 3. They admitted Sunil as a partner for $\frac{3}{7}$th share in future profits who brings ₹37,500 as his share of Goodwill. Half of which is withdrawn by sacrificing partners. Record Journal entry for Goodwill withdrawn by Partners.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) -
Vikas's Capital A/c Dr 7,500
Rahul's Capital A/c Dr 11,250
To Bank A/c 18,750
Old ratio = 2:3
Sunil's new share = 3/7th
Let total share = 1
Sunil's share = 3/7
Remaining share = 1-3/7
= 4/7
This share will be distributed between old partners in old ratio.
New share of Vikas = 4/7 x 2/5
= 8/35
New share of Rahul = 4/7 x 3/5
= 12/35
sacrificing share of Vikas = 2/5 - 8/35
= (14-8)/35
= 6/35
Sacrificing share of Rahul = 3/5 - 12/35
= (21-12)/35
= 9/35
Sacrificing ratio = 6: 9 or 2:3
Goodwill will be shared in this ratio.
Goodwill = ₹37,500
1/2 is withdrawn = 37,500 x 1/2
= ₹18,750
This will be shared in 2:3
Vikas share = 18,750 x 2/5
= 7,500
Rahul share = 18,750 x 3/5
= 11,250
Withdrawal entry will be-
Vikas's Capital A/c Dr 7,500
Rahul's Capital A/c Dr 11,250
To Bank A/c 18,750