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A, B and C were partners in a firm sharing profits in the ratio of 6 : 5 : 4. Their capitals were A : Rs 1,00,000, B : Rs 80,000 and C:Rs 60,000 respectively. On 1st April, 2009, C retired from the firm and the new profit sharing ratio between A and B was decided as 11 : 4. On C's retirement, the goodwill of the firm was valued at Rs 90,000. Showing your calculations clearly, pass necessary Journal Entry for the treatment of goodwill on C's retirement. |
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Answer» A, B and C were partners in a firm sharing profits in the ratio of 6 : 5 : 4. Their capitals were A : Rs 1,00,000, B : Rs 80,000 and C:Rs 60,000 respectively. On 1st April, 2009, C retired from the firm and the new profit sharing ratio between A and B was decided as 11 : 4. On C's retirement, the goodwill of the firm was valued at Rs 90,000. Showing your calculations clearly, pass necessary Journal Entry for the treatment of goodwill on C's retirement. |
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