Question 24 Chapter 6 of +2 Part-1 - USHA Publication 12 Class Part - 1

Question 24 Chapter 6 of +2-Part-1

24. (Goodwill does not exists) Ramesh, Suresh and Naresh were partners in a firm sharing profits in the ratio of 5: 3:2. Naresh retired and the new profit sharing ratio between Ramesh and Suresh was 2:3. On Naresh's retirement, the goodwill of the firm was valued at Rs. 1,20,000 .Pass necessary journal entry for the treatment of goodwill on Naresh's retirement, without raising goodwill account.

The solution of Question 24 Chapter 6 of +2 Part-1: -

?si=LhgEXjK500t6ezNP

Total Goodwill of the firm (given ) = Rs 1,20,000

Naresh’s share in total profit	=	2
		10

Naresh share in goodwill	=	1,20,000	x	2
				10
	=	Rs 24,000

Gaining ratio = New share - Old share

Ramesh’s gain	=	2	-	5
		5		10
	=	(-1)		(sacrifice)
		10

Suresh’s gain	=	3	-	3
		5		10
	=	3		(Gain)
		10

Because whole gain is to Suresh , he will pay for whole of the goodwill to Ramesh & Naresh

Journal

Date	Particulars		L.F.	Debit	Credit
a)	Suresh’s capital A/c	Dr.		36,000
	To Ramesh’s capital A/c				12,000
	To Naresh’s capital A/c				24,000
	(Being goodwill adjusted )

Comment if you have any questions.