Vikas and Rahul are partners sharing profits in the ratio of . They admit Sunil as a partner for a share in future profits. Sunil brings as his share of Goodwill, half of which is subsequently withdrawn by the sacrificing partners. Identify the correct journal entry to record the withdrawal of Goodwill by the partners.
- APremium for Goodwill A/c Dr 37,500 \ To Vikas's Capital A/c 15,000 \ To Rahul's Capital A/c 22,500
- BVikas's Capital A/c Dr 7,500 \ Rahul's Capital A/c Dr 11,250 \ To Bank A/c 18,750
- CBank A/c Dr 18,750 \ To Vikas's Capital A/c 7,500 \ To Rahul's Capital A/c 11,250
- DVikas's capital A/c Dr 15,000 \ Rahul's Capital A/c Dr 22,500 \ To Bank 37,500
Solution & Step-by-step Explanation
Let's analyze the transaction details step by step:\begin{enumerate}\item Since no alternate information regarding the profit sacrifice is given, the sacrificing ratio matches the old profit-sharing ratio, which is .\item Sunil brings a total goodwill premium of . This is credited to Vikas and Rahul in their sacrificing ratio ():
\item The question asks for the entry where \textbf{half of the premium is withdrawn} by the partners.\item Total value withdrawn .\item Amount debited from individual capital accounts:
\end{enumerate}The resulting journal entry for the withdrawal process is:
\item The question asks for the entry where \textbf{half of the premium is withdrawn} by the partners.\item Total value withdrawn .\item Amount debited from individual capital accounts:
\end{enumerate}The resulting journal entry for the withdrawal process is: