Question

R, S and M are partners sharing profits in the rule of 3:2:1. S wants to retire from the firm. For
this purpose, goodwill is valued at 2 years purchase of average super profits of last three year.
The profits of the last three years are Rs 35,000, Rs 37.500 and Rs. 40,000 respectively. The
normal profit for similar lirit is Rs. 28,500, Prins journal entry for goodwill ​

Answer 1

of 3:2:1. S wants to retire from the firm. For

this purpose, goodwill is valued at 2 years purchase of average super profits of last three year.

The profits of the last three years are Rs 35,000, Rs 37.500 and Rs. 40,000 respectively. The

normal profit for similar lirit is Rs. 28,500, Prins journal entry for goodwill