Question

2. P, Q and R share profits in the ratio of 5:4:3. R retires and the new ratio is 5:3. If R is given Rs. 6000 as goodwill, what will be the journal entry

Answer 1

P's Capital A/c 1000

Q's Capital A/c 5000

  To R's Capital A/c 6000

P's Capital A/c 5000

Q's Capital A/c 1000

 To R's Capital A/c 6000

P's Capital A/c 3750

Q's Capital A/c 2250

  To R's Capital A/c 6000

P's Capital A/c 3333

Q's Capital A/c 2667

   To R's Capital A/c 6000

Answer 2

P's CapitalA/c Dr.5,000Q's Capital A/c Dr.1,000 TO R's Capital A/c. 6,000

Explanation:-

Old Ratio of P,Q,R = 5:4:3

New Ratio of P,Q = 5:3

# Calculation of Gaining Ratio:

P's Gain =5/8 - 5/12 = 5/24

Q's Gain =3/8 - 4/12 = 1/24

Thus, the Gaining Ratio of P and Q = 5:1.

P and Q will be debited in the gaining ratio 5:1 respectively and R's will be credited with 6,000 as part of the goodwill.