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 Rs. 1,80,000. Laxman retires and at the time of his retirement, goodwill is valued at Rs. 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 Rs. 1,20,000. Give the necessary journal entries to record goodwill and to distribute the profit. Show your calculations clearly.
