1A.B.C& Dwere partners sharing profits in the ratio of 3:3:2:2. On 1" April 2020,0
retired owing to ill health. It was decided by A, B & C that in future their profit sharing
ratio would be 3: 2:1. Goodwill of the firm is valued at 86,00,000. Goodwill ready
appeared in the Balance Sheet at 250,000. Pass necessary Journal entries
Answers
Answer:
Working Notes 1:
3:2:3:24:3:2:1
S/R of A= Old Ratio - New Ratio =
10
3
−
10
4
=−
10
1
⇒ Gaining
S/R of B= Old Ratio - New Ratio =
10
2
−
10
3
=−
10
1
⇒ Gaining
S/R of C= Old Ratio - New Ratio =
10
3
−
10
2
=
10
1
⇒ Sacrificing
S/R of D= Old Ratio - New Ratio =
10
2
−
10
1
=
10
1
⇒ Sacrificing
A's Capital A/c Dr. 27,000
B's Capital A/c Dr. 27,000
To C's Capital A/c 27,000
To D's Capital A/c
(Gaining partners compensate sacrificing partners) 27,000
Working Notes 2:
Calculation of Adjusted Capital
A=2,00,000−36,000=Rs.1,64,000
B=2,50,000−33,000=Rs.2,17,000
C=2,77,000−9,000=Rs.2,68,000
D=3,37,000−6,000=Rs.3,31,000
Total Combined Capital =Rs.9,80,000
Working Notes 3:
A=9,80,000×
10
4
=3,92,000
B=9,80,000×
10
3
=2,94,000
C=9,80,000×
10
2
=1,96,000
D=9,80,000×
10
1
=98,000