Question

Ammu, Devu, Paru and Malu are partners sharing profits in ratio of 3:2:3:2. On the retirement of Paru, goodwill was valued at 1,20,000. Paru's share of goodwill will be given to her by adjusting it into the capital accounts of Ammu, Devu and Malu. Record necessary entry for the treatment of goodwill when new profit sharing ratio decided is 3:1:6.

Answer 1

Answer:

Step-1 : Find out Gaining Ratio Of remaining partner as New ratio - Old Ratio

Step-2 : Find out share of retiring partner in goodwill

Step-3 : Amount calculated under step-2 will be compensated by the gaining partner in gaining ratio.

Entry will be :

Gaining Partner's Capital A/C Dr

To Sacrificing Partner's Capital A/C