Kanika, Sakshi and Aroha are partners sharing profits and losses as 25%, 35% ana40%. Kanika decided to retire with the consent of other partners and sold her shareSakshi. Goodwill was valued at two and a half years' purchase of the average profitsof three years. Profits of these three years were 1,50,000, 1,70,000 and1,60,000. Reserve fund stood in the balance sheet at 1,30,000 at the time ofretirement.You are required to record necessary journal entries regarding above adjustment onKanika's retirement. Also prepare her capital account to find out the amount due inher, when her capital balance in the balance sheet was 1,25,000 before any of theabove adjustment.
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Answer:R, S and T were partners sharing profits and losses in the ratio of 5 : 3 : 2 respectively. On 31st March, 2018
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