Partners Capital Account

Partner 1 Partner 2 Partner 3 Partner 4

Write off Goodwill 150,000 150,000 150,000 150,000

Bal C/d 550,000 550,000 550,000 350,000

700,000 700,000 700,000 500,000

Assuming Jan 1, 2020 Each {Partner has Capital of 500,000 with equal sharing
Business Value as of that datye 2,100,000
Good will 600,000

Partner 4 added 500,000 Equal Sharing for all 4 partner in future

Entries Required
To Create Goodwill (Debit Good Will and Credit Capital in old partner old profit sharing ratio)
Dr Cr
Goodwill 600,000
Partner 1 200,000
Partner 2 200,000
Partner 3 200,000

To writeoff Goodwill (Credit Good Will and Debit Capital in new partner New profit sharing ratio)

Dr Cr

Partner 1 150,000
Partner 2 150,000
Partner 3 150,000
Partner 4 150,000
Good Will 600,000
Capital Account
Partner 1 Partner 2 Partner 3 Partner 4

Balance B/d 500,000 500,000 500,000

Goodwill Create 200,000 200,000 200,000
New Capital - - - 500,000

700,000 700,000 700,000 500,000