Q.D and E share profits equally. They admit F for 1/5 share. The goodwill of the firm is valued at ₹1,00,000, but F is unable to bring his share of goodwill in cash. Pass the journal entry to record F's share of goodwill by adjustment through the partners' capital accounts, assuming the sacrificing ratio is the same as the old ratio.

Since F cannot pay in cash, his own Capital Account is debited with his share of goodwill, and D and E are credited equally in their sacrificing ratio.

F's share of the firm's total goodwill = 1/5 × ₹1,00,000 = ₹20,000.

Because F cannot bring this amount in cash, no Bank/Premium for Goodwill entry is possible; instead, the adjustment is made entirely within the capital accounts, debiting the new partner and crediting the old partners in their sacrificing ratio (here, equal, since D and E shared equally and the sacrificing ratio matches the old ratio):

F's Capital A/c Dr ₹20,000

To D's Capital A/c ₹10,000

To E's Capital A/c ₹10,000 …

A common mistake is opening a Goodwill Account for the full ₹1,00,000 and raising it as an asset in the books — under the capital-adjustment method, only F's OWN SHARE of goodwill (₹20,000) is …