Question

A, B AND C ARE PARTNERS SHARING PROFITS AND LOSSES IN THE RATIO 4:3:2 .c retires from the business .the value of goodwill is ₹120000 .Goodwill appears in the books at ₹30000 and it will remain at that figure .Aand B decided to share the profits and losses in the ratio of 2:1 .pass necessary journal entry​

Answer 1

Answer:

ANSWER

1. Calculation of gaining ratio

Old ratio (A, B and C) = 4 : 3 : 2

B retires from the firm

New artio (A and C ) = 5 : 3

Gaining ratio = New ratio - Old ratio

A's new share = (5/8) - (4/9) = (45 - 32) /72 = 13/72

C's new share = (3/8) - (2/9) = (27 - 16) / 36 = 11/72

gaining ratio = 13 : 11

2. Adjustment of goodwill

C's share of goodwill = (10800 * 3) / 9 = 3600

This share of goodwill is to be debited to remaining partners' capital account in their gaining ratio (i.e., 13 : 11 )

Journal entry for the above will be:

A's capital A/c Dr. 1950

C's capital A/c Dr. 1650

To B's capital A/c 3600