1.

Ram, Laxman and Bharat are partners sharing profits in the ratio of 3 : 2 : 1. Goodwill is appearing in the books at a value of ₹ 1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at ₹ 2,52,000. Ram and Bharat decided to share future profits in the ratio of 2 : 1. The Profit for the first year after Laxman’s retirement amount to ₹ 1,20,000. Give the necessary journal entries to record goodwill and to distribute the profit. Show your calculations clearly.

Answer»

Notes:1. Calculation of Gaining RATIO Old Ratio (Ram, Laxman and Bharat) = 3 : 2 : 1 New Ratio (Ram and Bharat) = 2 : 1 Gaining Ratio = New Ratio - Old RatioGaining Ratio (Ram and Bharat) = 1 : 12. Calculation of Retiring Partner's SHARE of goodwillLaxman's share of goodwill is to be debited to remaining partners Capital A/c in their Gaining ratio (Ram, Bharat) = 1 : 1



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