Question

X Y and Z are partners sharing profits in the ratio of 2:3:5. Goodwill is appearing in
their books at a value of 1,00,000. X retires and on the day of X's retirement Goodwill
is valued at 90,000. Y and Z decided to share future profits equally. Pass the necessary
Journal Entries.​

Answer 1

Answer:

WN1: Calculation of Gaining Ratio

X :Y :Z=3:2:1 (Old ratio)

X :Z = 2:1 (New ratio)

Gaining Ratio = New Ratio - Old Ratio

WN2: Calculation of Retiring Partner’s Share of Goodwill

Y's share of goodwill will be brought by X and Z in their gaining ratio 1:1

Therefore, X's Capital A/c will be debited with  

And, Y's Capital A/c will be debited with  

Explanation: