Question

A,B and C are partners sharing profits am 20%, 30% and 50%. A decided to retire with the
consent of other partners and sold his share to B. Goodwill was valued at two and a half
year's purchase of average profits of three years. Profits of these three years were 50,000 ,
70,000 and 60000. Reserve Fund stood in the balance sheet at 30,000 at the time of
his retirement. You are required to record necessary journal entries to record above
adjustment on A 's retirement. Also prepare A's Capital Account to find out the amount due
to him when his capital balance in the balance sheet was 100000 before any adjustment.
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Answer 1

Answer:

be admitted into the firm only with the consent of all the existing partners unless ... Ram and Shyam are partners in a firm sharing profits in the ratio of 3:2. They ... Normally, the need for valuation of goodwill arises at the time of sale of a business. ... Calculate the value of goodwill on the basis of three years' purchase of.

Explanation:

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