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Entire goodwill should be credited to K's Capital only, Since Lis gaining 11/56 from K, he must have to pay in proportionate amount to kas under, i.e., if M brings for 8/56 73,600, L should pay for 11/564,950 (i.e. * 3.600 x 11/56 x 56/8) Illustration 34. 051 Red and White are partners in a firm sharing profits and losses is the ratio of 3:2. On 1st July 2013 the positions of the firm as follows: Liabilities Assets Capital Accounts: Building 50.000 Red Machinery 2.50,000 White 1.50,000 Furniture 40,000 98.000 Stock 60,000 2,48,000 Debtors 90,000 General Reserve 84,000 Cash 12,000 Sundry Creditors 1,70,000 5,02,000 5,02,000 Blue joined the firm as a partner from this date and the following terms and conditions were agreed upon: (a) Red, White and Blue will share the future profits of the firm in the ratio 5:3:2, respectively. (b) Blue would first pay 10,000 as his share of Goodwill and this sum is to be retained in the business. (c) The value of Machinery is to be increased by