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X,h and z were partners in a firm sharing profits in the radio of 3:2:1. Z retired and the new profit sharing radio between X and y was 1:2.on z's retirement the goodwill of the firm was valued at 30,000. pass necessary Journal entry for the treatment of good will on Z's retirement. |
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Answer» Z share of goodwill = 30000*1/6 = 5000 gaining ratio = NEW ratio- OLD ratio X = 1/3-3/6 = 6-9/18 =(-)3/18. = 1/6 ( SACRIFICE) Y = 2/3-2/6 = 12-6/18 = 6/18. = 1/3 ( gain) X sacrifice ANDY gains. So Y compensate both X and Z X share in goodwill 30000*1/6 = 5000 journal for goodwill Y's capital account Dr. 10000 To X's capital a/c. 5000 To Z's capital a/c 5000 3/18:6/18 1:2 |
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