Question

Ashok, Rakesh and Mukesh were partners sharing profits and losses in the ratio of 2 : 2 : 1. On 1st April, 2023, their goodwill was valued at ₹ 3,00,000 : there being no account for it in the books. On this date Rakesh retired. Pass the Journal Entry to record goodwill.

Answer 1

Journal entries
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	Ashok's Capital A/c   ...Dr.		80,000
	Mukesh's Capital A/c   ...Dr.		40,000
	To Rakesh's Capital A/c			1,20,000
	(Being Rakesh's share of goodwill adjusted through the Capital Accounts)

Working note:

Rakesh's share of goodwill:

₹ 3,00,000 × `2/5` = ₹ 1,20,000

Rakesh's share is gained by Ashok and Mukesh in their old ratio 2 : 1.

Ashok's gain = ₹ 1,20,000 × `2/3` = ₹ 80,000

Mukesh's gain = ₹ 1,20,000 × `1/3` = ₹ 40,000