Black and Smart are in partnership, sharing profits and losses equally. They decide to admit King. By

Question:

Black and Smart are in partnership, sharing profits and losses equally. They decide to admit King. By agreement, goodwill valued at £40,000 is to be introduced into the business books. King is required to provide capital equal to that of Smart after she has been credited with her share of goodwill. The new profit sharing ratio is to be 8:3:5 respectively for Black, Smart and King.

The balance sheet before admission of King showed:

Show:

(a) Journal entries for admission of Smart.

(b) Opening balance sheet of new business.

(c) Journal entries for writing off the goodwill which the new partners decided to do soon after the start of the new business.

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Frank Woods Business Accounting Volume 1

ISBN: 9780273681496

10th Edition

Authors: Frank Wood, Alan Sangster

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Question Posted: Aug 20, 2023 02:00 AM

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Black and Smart are in partnership, sharing profits and losses equally. They decide to admit King. By

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To record the admission of King into the partnership and the subsequent adjustments you can follow t...View the full answer

Frank Woods Business Accounting Volume 1

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