If New Partner Brings Goodwill into the business by way of Cash... which of the following journal entry is correct --->
Cash/Bank A/c Dr
To Goodwill A/c
OR
Cash/Bank A/c Dr
To New Partners Capital A/c
Anyone sir... please clarify..... its urgent
mounica (student) (143 Points)
25 April 2014If New Partner Brings Goodwill into the business by way of Cash... which of the following journal entry is correct --->
Cash/Bank A/c Dr
To Goodwill A/c
OR
Cash/Bank A/c Dr
To New Partners Capital A/c
Anyone sir... please clarify..... its urgent
CA Shubham Sarraph
(CA CS PROFESSIONAL M.COM)
(555 Points)
Replied 25 April 2014
CASH/BANK A/C DR.
TO GOODWILL A/C
BECAUSE GOODWILL CAN'T BE CONSIDER AS CAPITAL.
CA Shubham Sarraph
(CA CS PROFESSIONAL M.COM)
(555 Points)
Replied 25 April 2014
It's is possible that new partner take consolidated capital and there after transfer it as goodwill.
TKKKKKK
(PRACTICING CA)
(3268 Points)
Replied 25 April 2014
It depends of whether partners want to show goodwill in books or not.
If they want to show goodwill
Cash a/c Dr
To new partner a/c
goodwill a/c Dr
to old partner's capital a/c(sacrificing ratio)
If they don't want to show goodwill
cash a/c Dr
to new partner's capital a/c
new partner's capital a/c Dr
To old partner's capital a/c (sacrificing racio)
mounica
(student)
(143 Points)
Replied 25 April 2014
dear khatri
in ur reply u had given
if goodwill is to show in a/cs'
then how the new partner a/c will be debited against his goodwill contribution
is any additional journal entry is required... pl.clarify
priyanka kolar
(student)
(22 Points)
Replied 25 April 2014
TKKKKKK
(PRACTICING CA)
(3268 Points)
Replied 25 April 2014
I will reply to tomorrow on this matter...
Sidharth
(student)
(25 Points)
Replied 26 April 2014
Babi
(Accountant)
(27 Points)
Replied 26 April 2014
PARBIN AGARWAL
(ACCOUNTS)
(21 Points)
Replied 27 April 2014
Annu
(Chase your Dreams)
(825 Points)
Replied 27 April 2014
Cash A/c ....dr
To Goodwill a/c
is the correct entry...
Jag Bhushan Sharma
(Faculty in a B-School)
(633 Points)
Replied 28 April 2014
I am giving below the link where you can find the full treatment of goodwill on admision of a partner.
https://www.jbsclasses.com/187/journal-for-treatment-of-goodwill
TKKKKKK
(PRACTICING CA)
(3268 Points)
Replied 28 April 2014
If a new partner does not bring goodwill in cash then
goodwill a/c dr
To old partner's capital a/c (in sacrificing ratio)
If a new partner brings cash as goodwill
cash a/c dr
To New Partner a/c
New partner a/c Dr
to old partner capital a/c (in sacrificing ratio)
(I have done some mistake in first reply.)
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