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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
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 the treatment of N’s share of goodwill.
N’s share = ₹60,000 × 2/6 = ₹20,000. Gaining ratio: M = 1/2 – 3/6 = Nil; O = 1/2 – 1/6 = 2/6 (Gain). N’s share is borne entirely by O.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| O’s Capital A/c Dr. | 20,000 | |||
| To N’s Capital A/c | 20,000 | |||
| (N’s share of goodwill borne by O, the only gaining partner) |
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.21 - Retirement of a Partner", focusing on key definitions, step-by-step concepts, applications, and revision guidelines relevant to Chapter 5 - Retirement 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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