Question

X and Y are in partnership sharing profits in the ratio of 3:2 . With effect from 1 st April 2018, they agreed to share profits in the ratio of 1:2 . For the purpose , goodwill of the firm is to be valued at two years of purchase of the average profit of last three years ,which were ₹1,50,000;₹1,60,000 and ₹2,00,000 respectively. The reserves appear in the books at ₹1,10,000. Partners decide to continue showing Reserves in the books . You are required to give effect to the change by passing a single journal entry.

Answer 1

X's Gain 4/15 and Y's Sac 4/15
Goodwill= 5,10,000*2/3=3,40,000
रिजर्व 1,10,000
Total 4,50,000
X Dr. 1,20,000
To Y 1,20,000