Based on following, answer the question.
Amrita and Kalyani are partners sharing profits in the ratio of 3:2. They decided to expand the business by admitting Suraj as new partner for 1/4th share. Suraj's share of goodwill is valued at ₹90,000 for which he compensated Amrita and Kalyani in the ratio of 1:4. Following information is also provided:
| Particulars | Book value (₹) | Revalued figure (₹) |
| Machinery | 25,00,000 | 27,00,000 |
| Land | 10,00,000 | 50,00,000 |
| Computers | 2,50,000 | 50,000 |
Workmen Compensation Fund ₹5,00,000. Claim against workmen compensation is ₹2,00,000 and goodwill appeared in the books at ₹60,000.
What journal entry will be passed for goodwill appearing in the books?
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Amrita’s Capital A/c Dr. ₹36,000 Kalyani’s Capital A/c Dr. ₹24,000 To Goodwill A/c ₹60,000
Goodwill already in the books belongs to the old partners. On admission it is written off by debiting the old partners’ capital accounts in their old profit sharing ratio (3 : 2).
Amrita’s share = ₹60,000 × 3/5 = ₹36,000
Kalyani’s share = ₹60,000 × 2/5 = ₹24,000
Amrita’s Capital A/c Dr. ₹36,000
Kalyani’s Capital A/c Dr. ₹24,000
To Goodwill A/c ₹60,000
NCERT (2026-27 edition): |