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Target Exam

CUET

Subject

Accountancy Part A

Chapter

Admission of a Partner

Question:

Vijay and Sanjay are partners in a firm sharing profits and losses in the ratio of 3:2. They admitted Ajay into partnership with 1/4 share in profits. Ajay brings in Rs. 30,000 for capital and the requisite amount of premium in cash. The goodwill of the firm is valued at Rs. 20,000. The new profit sharing ratio is 2:1:1. Give necessary journal entry for the adjustment of goodwill.

Options:
ParticularsDr. AmountCr. Amount
Premium for Goodwill A/c Dr. 20,000  
    To Vijay’s Capital A/c   12,000
    To Sanjay’s Capital A/c   8,000
ParticularsDr. AmountCr. Amount
Vijay’s Capital A/c Dr. 5,000  
    To Ajay’s Capital A/c   2,000
    To Sanjay’s Capital A/c   3,000
ParticularsDr. AmountCr. Amount
Premium for Goodwill A/c Dr. 5,000  
    To Vijay’s Capital A/c   2,000
    To Sanjay’s Capital A/c   3,000
ParticularsDr. AmountCr. Amount
Vijay’s Capital A/c Dr. 20,000  
    To Ajay’s Capital A/c   12,000
    To Sanjay’s Capital A/c   8,000
Correct Answer:
ParticularsDr. AmountCr. Amount
Premium for Goodwill A/c Dr. 5,000  
    To Vijay’s Capital A/c   2,000
    To Sanjay’s Capital A/c   3,000
Explanation:

The correct answer is Option (3) → 

ParticularsDr. AmountCr. Amount
Premium for Goodwill A/c Dr. 5,000  
    To Vijay’s Capital A/c   2,000
    To Sanjay’s Capital A/c   3,000

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