Question

X,y,z are partners sharing profits in the ratio 5:3:2. They Decided to share future profits in the ratio 1:2:1. Goodwill of the firm is valued at Rs.40000. the firm's book shows general reserves of Rs.24000 and P&L a/c (debit balance) of Rs.16000 . Pass journal entry to give effect of change in PSR

Answer 1

Explanation:

Goodwill =

$40000 \times 5 \div 10 \\ 40000 \times 3 \div 10 \\ 40000 \times 2 \div 10$