Sarthaks Test
0 votes
in Accounts by (64.1k points)

P, Q and R were partners sharing profits in the ratio of 2:1:1. Q retired and the new profit-sharing ratio between P and R was equal. On Q’s retirement, the goodwill of the firm was valued at Rs.40,000. Pass necessary Journal entry for the treatment of goodwill without opening Goodwill Account on Q’s retirement.

1 Answer

0 votes
by (106k points)
selected by
Best answer

Working Note :

1. calculation of gaining ratio

old ratio (P,Q and R ) = 2:1:1

Q retires from the firm 

New Ratio (p and R) = 1 : 1:1

gaining ratio = New ratio - old ratio

2. Adjustment of goodwill

goodwill of the firm = Rs.40,000

This share of goodwill is to be debited to R's capital account.

Welcome to Sarthaks eConnect: A unique platform where students can interact with teachers/experts/students to get solutions to their queries. Students (upto class 10+2) preparing for All Government Exams, CBSE Board Exam, ICSE Board Exam, State Board Exam, JEE (Mains+Advance) and NEET can ask questions from any subject and get quick answers by subject teachers/ experts/mentors/students.