Question

A, B and Care partners in a firm sharing profits in the ratio 4:3:2
With effect from 1st January 2016, they agreed to share profits in the
ratio 3:2: 4. The partnership deed provided that in the event of change
in profit sharing ratio goodwill should be valued at two years' purchase
of average profits of last 3 years profit
. The profits of 2013, 2014 and
2015 were * 30,000, 36,000 and 2 42,000 respectively.
Pass necessary journal entry for goodwill adjustment.​

Answer 1

Sharing of profit ( Old Ratio) = 15000 : 10000 : 5000

Sharing of profit ( New Ratio) = 12000 : 12000 : 6000

Difference - A Cr. 3000 ; B Dr. 2000 ; C Dr. 1000