Rupert and Linda are in partnership, sharing profits and losses equally. They decide to admit Emma. By agreement, goodwill valued at £6,000 is to be introduced into the business books. Emma is required to provide capital equal to that of Linda after she has been credited with her share of goodwill. The new profit sharing ratio is to be 4:3:3 respectively for Rupert, Linda and Emma.

The balance sheet before admission of Emma showed:

Show:

(a) Journal entries for admission of Emma.

(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.

Transcribed Image Text:

Fixed and current assets Cash Current liabilities Capital Rupert Capital Linda 15,000 2,000 17,000 ( 5,000) 12,000 8,000 4,000 12,000