Basim and Hafid are partners in a firm sharing profits and losses in the ratio of 2:1.Mujeeb is admitted in to partnership for 1/3 share in profits. He brings OMR 15,000 as capital. But he is not in a position to bring any amount for his share of goodwill which has been valued at OMR 30,000.

i) Give necessary journal entries under each of the following situations.

1. When there is no goodwill appearing in the books of the firm. (2 marks)
2. When the goodwill appears at OMR 15,000 in the books of the firm (2 marks)
3. When the goodwill appears at OMR 36,000 in the books of the firm (2 marks)

ii) Do you advise that assets and liabilities must be revalued at the time of admission of a partner?

If so why? Also describe how is this treated in the book of account? (4 marks)