Question

Amal
, Bikki and Chandu are partners sharing profits in the ratio of 1:2:3. Chandu retires and
his capital, after making adjustments for reserves and gain (profit) on revaluation is * 2,20,000
Amal and Bikki agreed to pay him * 2,50,000 in full settlement of his claim. Pass necessary
Journal entry for the treatment of goodwill if new profit-sharing ratio is decided at 1:3.​

Answer 1

Explanation:

I hope you like the solution

Answer 2

Given:

• Amal, Bikku and Chandu are partners in a firm, sharing profits and losses in the ratio 1:2:3.
• Chandu retires.
• Chandu's capital is Rs 2,20,000.
• Amal and Bikki pay Chandu Rs 2,50,000 in full settlement.
• The new profit-sharing ratio is 1:3.

Objective: To pas‎s the necessary journal entry to adjust the goodwill.

Answer:

• Amal's old ratio = 1/6
• Bikki's old ratio = 2/6
• Chandu's old ratio = 3/6

• Amal's new ratio = 1/4
• Bikki's new raio = 3/4

Chandu's goodwill = Rs 2,50,000 - Rs 2,20,000 = Rs 30,000

Calculation of the gaining ratio:

Gaining ratio = New ratio - Old ratio

For Amal:

• Gaining ratio = 1/4 - 1/6 = (6 - 4)/24 = 2/24

For Bikki:

• Gaining ratio = 3/4 - 2/6 = (18 - 8)/24 = 10/24

Therefore, the gaining ratio is 2:10 or 1:5.

The goodwill will be distributed among the old partners in their gaining ratio.

• Amal's share of goodwill = Rs 30,000 × 1/6 = Rs 5,000
• Bikki's share of goodwill = Rs 30,000 × 5/6 = Rs 25,000

Journal entry:

Gaining partner's capital A/c ... Dr - Rs

• To retiring partner's capital A/c - Rs

(Goodwill adjusted.)

Amal's capital A/c ... Dr - Rs 5,000

Bikki's capital A/c ... Dr - Rs 25,000

• To Chandu's capital A/c - Rs 30,000

(Goodwill adjusted.)