P, Q and S are partners in a firm sharing profit and losses in the ratio of 3:2:1. They agreed to admit R as a partner with 1/6th share in profits of the firm. The following Journal entries were passed on his admission. Arrange them in sequence
(A)
| Date | Particulars | L.F. | Dr. Amount | Cr. Amount |
|---|---|---|---|---|
| P's Capital A/c Dr. | 5,400 | |||
| Q's Capital A/c Dr. | 3,600 | |||
| S's Capital A/c Dr. | 1,800 | |||
| To Goodwill A/c | 10,800 | |||
| (Being existing goodwill Rs. 10,800 written off in old profit sharing ratio) |
(B)
| Date | Particulars | L.F. | Dr. Amount | Cr. Amount |
|---|---|---|---|---|
| Cash A/c Dr. | 64,800 | |||
| To R's Capital A/c | 60,000 | |||
| To Premium for Goodwill A/c | 4,800 | |||
| (Being R brought capital Rs. 60000 and his share of goodwill Rs. 4800) |
(C)
| Date | Particulars | L.F. | Dr. Amount | Cr. Amount |
|---|---|---|---|---|
| P's Capital A/c Dr. | 2,400 | |||
| Q's Capital A/c Dr. | 1,600 | |||
| S's Capital A/c Dr. | 800 | |||
| To Cash A/c | 4,800 | |||
| (Being share of goodwill withdrawn by old partners ) |
(D)
| Date | Particulars | L.F. | Dr. Amount | Cr. Amount |
|---|---|---|---|---|
| Premium for Goodwill A/c Dr. | 4,800 | |||
| To P's Capital A/c | 2,400 | |||
| To Q's Capital A/c | 1,600 | |||
| To S's Capital A/c | 800 | |||
| (Being goodwill brought by R distributed in sacrificing ratio) |
Find the correct sequence :
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → (A), (B), (D), (C)
The entries follow the order in which the events happen on R’s admission: old goodwill is cleared first, then R pays his premium, then the premium reaches the partners who sacrificed, and only then can they draw it out.
(A) The goodwill already in the books belongs to the old partners, so it is written off in the old ratio (3 : 2 : 1) before anything else.
(B) R brings in his capital of Rs. 60,000 and his premium for goodwill of Rs. 4,800 in cash.
(D) The premium is credited to the old partners in their sacrificing ratio; here it is 3 : 2 : 1, because they give up R’s 1/6 share in their old ratio.
(C) The old partners withdraw their share of the premium, which they can do only after it has been credited to them.
Note: In entry (ii) of the second book extract below, the account debited is printed as “Goodwill A/c”. Entry (i) credits the premium brought by the new partner to Premium for Goodwill A/c, so it is Premium for Goodwill A/c that is debited when the premium is passed on to the sacrificing partners, as in entry (D) of this question. The words “Premium for” seem to have been left out in the book.
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NCERT (2026-27 edition):
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