Question

Aparna, Manisha and Sonia are partners sharing profits in the ratio of 3:2:1. Manisha retires and goodwill of the firm is valued at Rs 1,80,000. Aparna and Sonia decided to share future in the ratio of 3:2. Pass necessary Journal entries.

Answer 1

Given:

• Aparna, Manisha and Sonia are partners in a firm, sharing profits and losses in the ratio 3:2:1.
• Manisha retires.
• The goodwill of the firm is valued at Rs 1,80,000.
• The new profit-sharing ratio is 3:2.

Objective: To pas‎s the necessary journal entries.

Answer:

• Aparna's old share = 3/6
• Manisha's old share = 2/6
• Sonia's old share = 1/6

• Aparna's new share = 3/5
• Sonia's new share = 2/5

Retiring partner's share of goodwill = Firm's goodwill × Retiring partner's share

Manisha's goodwill = Rs 1,80,000 × 2/6 = Rs 60,000

Calculation of the gaining ratio:

Gaining ratio = New ratio - Old ratio

For Aparna:

• Gaining ratio = 3/5 - 3/6 = (18 - 15)/30 = 3/30

For Sonia:

• Gaining ratio = 2/5 - 2/6 = (12 - 10)/30 = 2/30

Therefore, the gaining ratio is 3:2.

The retiring partner's goodwill will be distributed accordingly.

• Aparna's share of goodwill = Rs 60,000 × 3/5 = Rs 36,000
• Sonia's share of goodwill = Rs 60,000 × 2/5 = Rs 24,000

Journal entry:

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

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

(Goodwill adjusted.)

Aparna's capital A/c ... Dr - Rs 36,000

Sonia's capital A/c ... Dr - Rs 24,000

• To Manisha's capital A/c - Rs 60,000

(Goodwill adjusted.)