ab and C are partners sharing profits in the ratio of 4:3:2. B decides to retire and
surrenders his share to A and C in the ratio of 3:1.The Goodwill of the firm is valued at 1.5
years purchase of super profits based on average profits of the last three years which were
Rs 2,00,000, Rs 2.40,000 and Rs 3,10.000 respectively. The normal profits for the similar
firm are Rs 1,70,000. Goodwill already appears in the books of the fim at Rs 72,000. The
profit for the first year ater B's retirement was Rs 540.000. Give the necessary journal
entries to adjust goodwill and to distribute profits.
Answers
Answer:
Goodwill of the firm is valued at 1.5
years purchase of super profits based on average profits of Goodwill of the firm is valued at 1.5
years purchase of super profits based on average profits of the last three years which were
Rs 2,00,000, Rs 2.40,000 and Rs 3,10.000 respectively. The normal profits for the similar
firm are Rs 1,70,000. GoodGoodwill of the firm is valued at 1.5
years purchase of super profits based on average profits of the last three years which were
Rs 2,00,000, Rs 2.40,000 and Rs 3,10.000 respectively. The normal profits for the similar
firm are Rs 1,70,000. Goodwill already appears in the books of the fim at Rs 72,000. The
profit for the first year ater B's retirement was Rs 540.000. Give the necessary journal
entries to adjust goodwill and to distributewill already appears in the books of the fim at Rs 72,000. The
profit for the first year ater B's retirement was Rs 540.000. Give the necessary journal
entries to adjust goodwill and to
entries to adjust goodwill and to