Question

a (b)(ii) and (iv) (c) (i), (iii) and (iv) (d) Only (ii) 5. A' and 'B' are partners in a firm. They share their profits and losses in the ratio of 3:2. They have decided that their new profits (losses) sharing ratio will be 1:1. At that time their goodwill is valued at * 30,000. Calculate amount of goodwill which will be given by B to A. solve the answer​

Answer 1

Solution :

•° Old ratio of A and B = 3 : 2

•° New ratio = 1 : 1

•° Goodwill of the firm = Rs. 30000

Let's find out share which partner is gaining or sacrificing

A's share = old share - new share = 3/5 - 1/2 = 6 - 5 = 1/10

• 1/10 shows A is sacrificing partner

B's share = old share - new share = 2/5 - 1/2 = 4 - 5/10 = (-1/10)

• (-1/10) shows B is gaining partner

Let's do journal entry

B's capital A/c Dr.(30000×1/10) 3000

To A's capital A/c 3000

Hence, B will be given 3000 of goodwill.