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✦ FREE LEARNING — CLASS 11 & 12 — CBSE · PSEB — ACCOUNTS · ECONOMICS · BST ✦
A, B and C were partners in a firm sharing profits in the ratio of 6 : 5 : 4. Their capitals were A – ₹1,00,000; B – ₹80,000 and C – ₹60,000. A retired from the firm and the new profit-sharing ratio between B and C was 1 : 4. On A’s retirement, goodwill of the firm was valued at ₹1,80,000. Showing your calculations clearly, pass the necessary Journal entry for the treatment of goodwill.
Gain / (Sacrifice): B = 1/5 – 5/15 = –2/15 (Sacrifice); C = 4/5 – 4/15 = 8/15 (Gain). A’s share = ₹1,80,000 × 6/15 = ₹72,000; B’s sacrifice = ₹1,80,000 × 2/15 = ₹24,000. C, the only gainer, compensates both.
JOURNAL
| Date | Particulars | L.F. | Dr. (₹) | Cr. (₹) |
|---|---|---|---|---|
| C’s Capital A/c Dr. | 96,000 | |||
| To A’s Capital A/c | 72,000 | |||
| To B’s Capital A/c | 24,000 | |||
| (A’s share and B’s sacrifice of goodwill borne by C, 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.23 - 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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