Anil and Uday are partners sharing profits equally. Arvind is admitted as a new partner. He brings Rs. 1,00,000 only out of his share of goodwill of Rs. 1,50,000. In this situation the journal entries will be:
Answer & explanation
Correct answer: option 4
The correct answer is Option (4) → (i) Bank A/c Dr. Rs. 1,00,000 to Premium for Goodwill A/c; (ii) Premium for Goodwill A/c Dr. Rs. 1,00,000 and Arvind’s Current A/c Dr. Rs. 50,000, to Anil’s and Uday’s capital A/cs Rs. 75,000 each
The old partners must receive the whole of the new partner’s share of goodwill, whether he brings it all in cash or not. The part he brings is credited through Premium for Goodwill A/c; the part he does not bring is debited to his Current A/c (his capital is kept intact). The total is credited to the old partners in their sacrificing ratio, which here is equal, as they share profits equally and nothing else is stated.
Arvind’s share of goodwill = Rs. 1,50,000
Brought in cash = Rs. 1,00,000
Not brought, debited to Arvind’s Current A/c = Rs. 1,50,000 − Rs. 1,00,000 = Rs. 50,000
Anil = Rs. 1,50,000 × 1/2 = Rs. 75,000
Uday = Rs. 1,50,000 × 1/2 = Rs. 75,000
(i) Bank A/c Dr. 1,00,000
To Premium for Goodwill A/c 1,00,000
(ii) Premium for Goodwill A/c Dr. 1,00,000
Arvind’s Current A/c Dr. 50,000
To Anil’s Capital A/c 75,000
To Uday’s Capital A/c 75,000
Note: NTA picked this question from an NCERT (2026-27) illustration and changed the figures. Do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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