Q.Continuing the facts of the previous illustration (A and B, ratio 3:2; C admitted for 1/4 share, bringing ₹80,000 capital and ₹20,000 premium for goodwill in cash): assume instead that A and B each withdraw HALF of their share of the goodwill premium in cash. Pass the additional journal entry required.

Half of each partner's credited premium share is simply paid out of the business in cash, reducing their capital accounts by that amount.

From the earlier illustration, A's Capital Account was credited with ₹12,000 and B's with ₹8,000 as their share of the goodwill premium.

Half of A's share = 12,000 ÷ 2 = ₹6,000, to be withdrawn.

Half of B's share = 8,000 ÷ 2 = ₹4,000, to be withdrawn.

Journal Entry:

A's Capital A/c Dr ₹6,000

B's Capital A/c Dr ₹4,000

To Bank A/c ₹10,000 …

Students sometimes withdraw an EQUAL amount for each partner (₹5,000 each, splitting ₹10,000 evenly) instead of half of what each partner was individually credited with — since A and B were credited unequally ( …