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Question 13 Chapter 6 of +2-A
13. L, M, and O are partners sharing profits and losses in the ratio of 4 : 3 : 2. M retires and the goodwill is valued at 72,000. Calculate M's share of goodwill and pass the Journal entry for Goodwill. L and O decided to share the future profits and losses in the ratio of 5 : 3.
| Date | Particulars |
L.F. | Debit | Credit | |
|---|---|---|---|---|---|
| L’s Capital A/c | Dr | 13,000 | |||
| O’s Capital A/c | Dr | 11,000 | |||
| To M’s Capital A/c | 24,000 | ||||
| (Being share of M’s goodwill adjusted) | |||||
Old Ratio of L, M, and O = 4: 3: 2
M retires from the firm
New Ratio of L, and O = 5 : 3
Gaining Ratio = New Ratio - Old Ratio
| L’s Gaining Share | = | 5 | - | 4 |
| 8 | 9 | |||
| = | 45 | - | 32 | |
| 72 | ||||
| = | 13 | |||
| 72 | ||||
| O’s Gaining Share | = | 3 | - | 2 |
| 8 | 9 | |||
| = | 27 | - | 16 | |
| 72 | ||||
| = | 11 | |||
| 72 | ||||
Firm’s Share of Goodwill = 72,000
M’s Share of Goodwill = Firm’s Goodwill X M's Shares
| M Share of Goodwill | = | 72,000 | X | 3 |
| 9 | ||||
| = | 24,000 |
Gaining Ratio of L and O = 13:11
| L will pay for M's Share of Goodwill | = | 24,000 | X | 13 |
| 24 | ||||
| = | 13,000 |
| O will pay for M's Share of Goodwill | = | 24,000 | X | 11 |
| 24 | ||||
| = | 11,000 |
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Accounting & Commerce Educator
Sarbjit Singh holds a B.Com and M.Com degree and has over 12 years of teaching experience in double entry bookkeeping, financial accounting, and business studies.
This guide covers "Q.No.13 | Chapter 6 – Retirement/Death of a Partner | T.S. Grewal 12 Class Book Keeping Part - A - Vol. 1", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter No. 6 - Retirement/ Death of a Partner.
It is primarily curated for Class 11 and Class 12 high school commerce, accounting, and economics students, as well as aspirants preparing for board exams or CA Foundation.
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