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Shivam, Kapil and Deepak are partners sharing profits in the ratio of 3 : 1 : 2. On 31st March, 2024, Kapil retired and his Capital Account, after adjustments of reserve and profit on revaluation, was ₹3,50,000. Shivam and Deepak paid him ₹4,20,000 in settlement of his claim, and a computer of ₹4,20,000 was given to Kapil. Pass the necessary Journal entries.
Hidden Goodwill (Kapil’s share) = ₹4,20,000 – ₹3,50,000 = ₹70,000, borne by Shivam and Deepak in their gaining ratio 3 : 2.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| Shivam’s Capital A/c Dr. (70,000 × 3/5) | 42,000 | |||
| Deepak’s Capital A/c Dr. (70,000 × 2/5) | 28,000 | |||
| To Kapil’s Capital A/c | 70,000 | |||
| (Kapil compensated for his share of goodwill in the gaining ratio 3 : 2) | ||||
| Kapil’s Capital A/c Dr. | 4,20,000 | |||
| To Computer A/c | 4,20,000 | |||
| (Computer given to Kapil in settlement of his account) |
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 "T.S. Grewal Class 12 Chapter 5 Q.20 - Retirement of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 5 - Retirement of a Partner.
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