A,B,C and D were partners sharing profits in the ratio of 1:2:3:4. D retired and his share was acquired by A and B equally. Goodwill was valued at 3 years’ purchase of average profit of last 4 years, which was ₹40,000. General Reserve showed a balance of ₹1,30,000 and D’s Capital in the Balance Sheet was ₹3,00,000 at the time of D’s retirement. You are required to record necessary Journal entries in the books of the firm and prepare D’s capital account on his retirement.
