Question

A, G, K were partners in A firm sharing profit in the ratio of 5:3:2. From 1st April 2014, they decided to share the profits equally. For this purpose the goodwill of the firm was valued at 2,40,000.
Pass necessary journal entry for treatment of goodwill on change in the profit sharing ratio of A, G and K.

Answer 1

Answer:

Goodwill of the firm is valued in the manner prescribed by the partnership deed. ... The retiring partner's capital account is credited with his share of goodwill and the amount is debited to the remaining partners' capital accounts in the ratio of their gain.

Explanation:

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