Question

7. XY and Zwere partners in a firm sharing profits in the ratio of 5:3:2. On 15 February 2018 X
died and the new profit sharing ratio of Y and Z was equal. On X's death the goodwill of the firm
was valued at Rs 50000​

Answer 1

Answer:

B and C are partners sharing profits and losses in the ratio 4:1 they admitted A for 1/3 share in profits. His Goodwill of the firm is valued at Rs.172000. what will be the value of A's Premium for goodwill and how much should be compensated to C

Answer 2

JOURNAL ENTRY AT THE DEATH OF X.

Explanation:

REFER TO THE ATTACHMENT FOR THE ADJUSTING ENTRY.

Working Notes:

1. X’s share of goodwill = 50,000 X5/10 = 25,000.

2. Calculation of Gaining Ratio

Gaining Share = New Share – Old Share

Y’s Gaining Share = 1/2 - 3/10 = 2/10  

Z’s Gaining Share = 1/2 - 2/10 = 3/10  

Hence, Gaining Ratio between Y and Z is 2:3.