Question 16:
A, B and C are partners sharing profits in the ratio of 3 : 2 : 1. B retired and the new profit-sharing ratio between A and C was 2 : 1. On B's retirement, the goodwill of the firm was valued at ₹ 90,000. Pass necessary Journal entry for the treatment of goodwill on B's retirement.
Answer:
|
Journal |
||||
|
Particulars |
L.F. |
Debit ₹ |
Credit ₹ |
|
|
A’s Capital A/c |
Dr. |
|
15,000 |
|
|
C’s Capital A/c |
Dr. |
|
15,000 |
|
|
To B’s Capital A/s |
|
|
30,000 |
|
|
(Being Adjustment B’s share of goodwill made) |
|
|
|
|
Working Notes:
WN 1Calculation of Gaining Ratio
Old Ratio (A, B and C) = 3 : 2 : 1
B retires from the firm.
New Ratio (A and C) = 2 : 1
Gaining Ratio=New Ratio − Old Ratio
A‘s share=2/3 -3/6 =4-3/6=1/6
B‘s share= 1/3 -1/6 =2-1/6=1/6
∴Gaining Ratio = 1 : 1
WN 2Adjustment of Goodwill
Goodwill of the firm = ₹ 90,000
B’s share of goodwill =90,000×2/3=30,000
This share of goodwill is to be debited to remaining Partners’ Capital Accounts in their gaining ratio (i.e. 1 : 1).
A’s and C’s capital will be debited =30,000×1/2=15000
Question 17:
M, N and O are partners in a firm sharing profits in the ratio of 3 : 2 : 1. Goodwill has been valued at ₹ 60,000. On N's retirement, M and O agree to share profits equally. Pass the necessary Journal entry for treatment of N's share of goodwill.
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
|
|
|
|
|
|
|
|
O’s Capital A/c |
Dr. |
|
20,000 |
|
|
|
To N’s Capital A/c |
|
|
|
20,000 |
|
|
(Being Adjustment of N’s share of goodwill) |
|
|
|
|
|
|
|
|
|
|
|
Working Notes:
WN1:Calculation of Gaining Ratio
M :N :O=3:2:1(Old ratio)
M :O =1:1(New ratio)
Gaining Ratio = New Ratio - Old Ratio
M's Gain =1/2−3/6=3−3/6=0
O's Gain=1/2−1/6=3−1/6=2/6
WN2: Calculation of Retiring Partner’s Share of Goodwill
N's share of goodwill=60,000×2/6=₹ 20,000
N's share of goodwill will be brought by O only.
Therefore, O's Capital A/c will be debited with ₹ 20,000
Question 18:
Aman, Bimal and Deepak are partners sharing profits in the ratio of 2: 3: 5. The goodwill of the firm has been valued at ₹37,500. Aman retired. Bimal and Deepak decided to share profits equally in future.
Calculate gain/sacrifice of Bimal and Deepak on Aman's retirement and also pass necessary Journal entry for the treatment of goodwill. (CBSE 2019)
Answer:
|
Journal |
|||||
|
Date |
Particulars |
L.F. |
Debit (₹) |
Credit (₹) |
|
|
Bimal’s capital a/c |
Dr. |
7,500 |
|||
|
|
To Amal’s capital a/c |
7,500 |
|||
|
|
(Being Goodwill adjusted) |
||||
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|
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|
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|
Working notes;
WN1-
Calculation of gaining and sacrificing ratio
|
|
Amal |
Bimal |
Deepak |
Old ratio |
2 : |
3 : |
5 |
New ratio |
Retires |
1 : |
1 |
Bimal = 3/10-1/2=3-5/10= -2/10
Deepak =5/10-1/2=5-5/10= 0/10
Gaining ratio of Sunil and David=13:11
WN2-
Firms goodwill =37,500
Share of retiring partner Amal is 2/10
Share of Amal share =37,500×2/10=7,500
Bimal will compensate 7,500
Question 19:
A, Band C were partners in a firm sharing profits and losses in the ratio of 2:3:1. Goodwill appeared in their books at ₹ 3,00,000. B retired from the firm on 1st April, 2024. On that date, the goodwill of the firm was valued at ₹ 5,40,000.
Pass the necessary Journal entries in the books of the firm for the treatment of goodwill on B's retirement.
(CBSE 2025 C)
Answer:
|
Journal |
||||
|
Date |
Particulars |
|
₹(Dr.) |
₹ (Cr.) |
|
|
A's Capital A/c |
Dr. |
1,00,000 |
|
|
|
B's Capital A/c |
Dr. |
1,50,000 |
|
|
|
Cs Capital A/c |
Dr. |
50,000 |
|
|
|
To Goodwill A/c by |
|
|
3,00,000 |
|
|
(Being Goodwill written off) |
|
|
|
|
|
A's Capital A/c |
Dr. |
1,80,000 |
|
|
|
Cs Capital A/c |
Dr. |
90,000 |
|
|
|
To B's Capital A/c |
|
|
2,70,000 |
|
|
(Being B compensated for his share of sacrifice) |
|
|
|
Question 20:
A, B, C and D are partners sharing profits in the ratio of 3:3:2:2 respectively. D retires and A, B and C decide to share future profits in the ratio of 3:2:1. Goodwill of the firm is valued at ₹6,00,000. Goodwill existed in the books at ₹4,50,000. Profits for the first year after D's retirement was ₹12,00,000. Give the necessary
Journal entries to record Goodwill and to distribute the profits. Show your calculations.
Answer:
|
Date |
Particulars |
|
L.F. |
(Dr.) ₹ |
(Cr.) ₹ |
|
1. |
A's Capital A/c |
Dr. |
|
1,35,000 |
|
|
|
B's Capital A/c |
Dr. |
|
1,35,000 |
|
|
|
C's Capital A/c |
Dr. |
|
90,000 |
|
|
|
D's Capital A/c |
Dr. |
|
90,000 |
|
|
|
To Goodwill A/c |
|
|
|
4,50,000 |
|
|
(Being old Goodwill written off) |
|
|
|
|
|
2. |
A's Capital A/c |
Dr. |
|
1,20,000 |
|
|
|
B's Capital A/c |
Dr. |
|
20,000 |
|
|
|
To C's Capital A/c |
|
|
|
20,000 |
|
|
To D's Capital A/c |
|
|
|
1,20,000 |
|
|
(Being sacrificing partners compensated) |
|
|
|
|
|
3. |
Profit and Loss Appropriation A/c |
Dr. |
|
12,00,000 |
|
|
|
To A's Capital A/c |
|
|
|
6,00,000 |
|
|
To B's Capital A/c |
|
|
|
4,00,000 |
|
|
To C's Capital A/c |
|
|
|
2,00,000 |
|
|
(Being profit distributed in 3:2:1) |
|
|
|
|
Working notes:
WN 1: Calculation Gaining and Sacrificing Ratio
Old Ratio (before retirement):
A : B : C : D = 3 : 3 : 2 : 2
Total parts = 3 + 3 + 2 + 2 = 10
A = 3/10
B = 3/10
C = 2/10
D = 2/10
New Ratio (after D retires):
A : B : C = 3 : 2 : 1
Total parts = 3 + 2 + 1 = 6
A = 3/6 = 1/2
B = 2/6 = 1/3
C = 1/6
Calculation Gaining/Sacrificing Ratio:
|
A |
= |
3/10 |
- |
3/6 |
= |
9-15/30 |
= |
-6/30 |
Gain |
|
B |
= |
3/10 |
- |
2/6 |
= |
9-10/30 |
= |
-1/30 |
Gain |
|
C |
= |
2/10 |
- |
1/6 |
= |
6-5/30 |
= |
1/30 |
Sacrifice |
|
D |
= |
2/10 |
- |
0/6 |
= |
6-0/30 |
= |
6/30 |
Sacrifice |
WN 2: Calculation share of Goodwill of Each partner
|
A |
= |
6,00,000 |
× |
-6/30 |
= |
1,20,000 |
Debit |
|
B |
= |
6,00,000 |
× |
-1/30 |
= |
20,000 |
Debit |
|
C |
= |
6,00,000 |
× |
1/30 |
= |
20,000 |
Credit |
|
D |
= |
6,00,000 |
× |
6/30 |
= |
1,20,000 |
Credit |
WN 3: Calculation share of old Goodwill to be written off
|
A |
= |
4,50,000 |
× |
3/10 |
= |
1,35,000 |
|
B |
= |
4,50,000 |
× |
3/10 |
= |
1,35,000 |
|
C |
= |
4,50,000 |
× |
2/10 |
= |
90,000 |
|
D |
= |
4,50,000 |
× |
2/10 |
= |
90,000 |
WN 4: Calculation share of profit distributed
|
A |
= |
12,00,000 |
× |
3/6 |
= |
6,00,000 |
|
B |
= |
12,00,000 |
× |
2/6 |
= |
4,00,000 |
|
C |
= |
12,00,000 |
× |
1/6 |
= |
2,00,000 |
Ts Grewal Solution 2026-2027
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Class 12 / Volume – I
Chapter 5 – Retirement of a Partner