The correct answer is: C. C’s A/c is debited for Rs. 3,000.
Explanation:
A and B are partners sharing profits in the ratio of 3 : 2. Their books showed goodwill at Rs. 3,000. C is admitted with $\frac{1}{4}^{{\text{th}}}$ share of profit and brings Rs. 10,000 as his capital. But, he is not able to bring in cash for his share of goodwill Rs. 3,000.
In this case, C’s capital will be Rs. 10,000 and his share of goodwill will be Rs. 3,000. Since he is not able to bring in cash for his share of goodwill, he will remain as a debtor for Rs. 3,000.
The journal entry for this transaction will be:
Dr. C’s A/c 3,000
Cr. Goodwill A/c 3,000
This entry will record C’s share of goodwill and will also show that he is a debtor for Rs. 3,000.
The following are the other options and their explanations:
A. Goodwill is raised by Rs. 12,000. This option is incorrect because the goodwill of the firm is already Rs. 3,000. When C is admitted, the goodwill of the firm will not be increased.
B. C will remain as debtor for Rs. 3,000. This option is correct as explained above.
D. Goodwill is raised by Rs. 9,000. This option is incorrect because the goodwill of the firm is already Rs. 3,000. When C is admitted, the goodwill of the firm will not be increased.