1.

Asha, Naveen and Shalini were partners in a firm sharing profits in the ratio of 5 : 3 : 2. Goodwill appeared in their books at a value of ₹ 80,000 and General Reserve at ₹ 40,000. Naveen decided to retire from the firm. On the date of his retirement, goodwill of the firm was valued at ₹ 1,20,000. The new profit ratio decided among Asha and Shalini is 2 : 3. Record necessary journal entries on Naveen’s retirement.

Answer»

Notes:Calculation of Gaining Ratio Gaining Ratio = NEW share - Old ShareThus, Both Asha and NAVEEN would be compensated by SHALINI in the ratio of 1 : 3



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