Question

A,b,c are partners sharing profits and losses in the ratio 3:2:1 decided to share future profits and losses equally with effect from 1st april 2020 .on that date ,the goodwill appeared in the books of account at 100000.but it was assuming that goodwill not appear in that books of account

Answer 1

Answer:

A's Capital a/c............... Dr ₹50,000

B's Capital a/c............... Dr ₹33,334

C's Capital a/c............... Dr ₹16,666

To Goodwill a/c. ₹1,00,000

(Being existing goodwill written off among old partner's on their old ratio)

Explanation:

In reconstitution of partnership, partners mostly distribute the balance sheet goodwill/existing goodwill on their old ratio. Those amounts will be debited to their capital a/c's respectively.