# Question 30 Chapter 3 of Class 12 Part – 1 VK Publication

Question 30 Chapter 3 of Class 12 Part - 1 VK Publication

Question 30 Chapter 3 of Class 12 Part – 1

30. Charu and Dinesh have been sharing profits in the ratio of 3:1. The net profits for the past four years’ have been Rs. 60,000; Rs. 50,000; Rs 90,000 and Rs. 1,20,000 respectively. It is now agreed that with effect from 1st April, 2017. Dinesh is to have 2/5th share in profits and for that purpose goodwill is to be valued on the basis of 2½ years’ purchase of average profit of the past four years. Give journal entry for the treatment of goodwill assuming that no goodwill account is to be opened.

## The solution of Question 30 Chapter 3 of Class 12 Part – 1: –

Journal Entry

 Date Particulars L . F Dr. ₹ Cr. ₹ 2017 Dinesh’s Capital A/c Dr. 30,000 April 1 To Charu’s Capital A/c 30,000 ( Being proportionate share of Goodwill adjusted among partners )

Working Notes:

 Average Profit = Total Profit Total No. of Year
 = 60,000+50,000+90,000+1,20,000 5

= Rs. 80,000

Goodwill= Average Profit x Number of Years’ Purchase = 80,000 x 2 = Rs. 2,00,000

 Particulars Charu Dinesh Partners’ Old Ratio 3/4 1/4 Partners’ New Ratio 3/5 2/5 Difference 3/20 (-3)/20 Net Effect Sacrifice Gain

Thus Proportionate Share of Goodwill to be adjusted

 2,00,000 X 3 20

= Rs. 30,000.

Comment if you have any questions.

Also, Check out the solved question of previous Chapters: –