# Question 16 Chapter 6 of +2-A – T.S. Grewal 12 Class Part – A Vol. 1

Question 16 Chapter 6 of +2-A

16. A B and C are partners sharing profits in the ratio of 3: 2: 1.
B retired and the new profit-sharing ratio between A and C was 2: 1. On B’s retirement, the goodwill of the firm was valued at 90,000. Pass necessary Journal entry for the treatment of goodwill on B’s retirement.

## The solution of Question 16 Chapter 6 of +2-A: –

 Date Particulars L.F. Debit Credit A’s Capital A/c Dr 15,000 C’s Capital A/c Dr 15,000 To B’s Capital A/c 30,000 (Being share of B’s goodwill adjusted)

### Working Note: –

Old Ratio of A, B and C = 3: 2: 1
B retires from the firm

New Ratio of A and C = 2: 1

#### Calculation of Gaining Ratio: –

Gaining Ratio = New Ratio – Old Ratio

 A’s gaining Share = 2 – 3 3 6 = 4 – 3 6 = 1 6
 C’s Gaining Share = 1 – 1 3 6 = 2 – 1 6 = 1 6

Firm’s Share of Goodwill = 90,000

B’s Share of Goodwill =  Firm’s Goodwill X B’s Shares

 B’s Share of Goodwill = 90,000 X 2 6 = 30,000

Gaining Ratio of A and C  = 1:1

 A’ gain = B’s Goodwill X Gaining share of A = 30,000 X 1 2 = 15,000
 C’ gain = Manisha’s Goodwill X Gaining share of Sonia = 30,000 X 1 2 = 15,000

#### T.S. Grewal’s Double Entry Book Keeping +2 (Vol. I: Accounting for Not-for-Profit Organizations and Partnership Firms)

• Chapter No. 1 – Financial Statement of Not-For-Profit Organisations
• Chapter No. 2 – Accounting for Partnership Firms – Fundamentals
• Chapter No. 3 – Goodwill: Nature and Valuation
• Chapter No. 4 – Change in Profit-Sharing Ratio Among the Existing Partners
• Chapter No. 5 – Admission of a Partner
• Chapter No. 6 – Retirement/Death of a Partner
• Chapter No. 7 – Dissolution of a Partnership Firm

### T.S. Grewal’s Double Entry Book Keeping (Vol. II: Accounting for Companies)

• Chapter No. 1 – Financial Statements of a Company
• Chapter No. 2 – Financial Statement Analysis
• Chapter No. 3 – Tools of Financial Statement Analysis – Comparative Statements and Common- Size Statements
• Chapter No. 4 – Accounting Ratios
• Chapter No. 5 – Cash Flow Statement

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