Question

A , B and C were Partners, Sharing Profits in the Ratio of 3 : 2 : 1 respectively . Balance Sheet of the Firm as at 31^st March, 2017 stood as under :

‘B’ Retired on the above date on the following terms : 

(i) Building to be Appreciated by Rs 8,800 . 

(ii) Provision for Doubtful Debts be made @ 5 % on Debtors . 

(iii) Goodwill of the Firm be Valued at Rs 9,000 . 

Pass necessary Journal Entries .

Answer 1

Working Note : 

B’s Share of Goodwill = Rs 9,000 x (2/6) = Rs 3,000 

Taken by Gaining Partners in 3 : 1 

A’s Share = Rs 3,000 x (3/4) = Rs  2,250 

C’s Share = Rs 3,000 x (1/4) = Rs 750