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Kavi, Ravi, Kumar and Guru Were Partners in the Firm Sharing Profits in the Ratio of 3:2:2:1. on 1.2.2017, Guru Retired and the New Profit Sharing Ratio Decided Between Kavi, Ravi and Kumar Were 3:1:1. on Guru’S Retirement, the Goodwill of the Firm Was Valued at Rs 3, 60,000. Showing Your Working Notes Clearly, Pass Necessary Journal Entry in the Books of the Firm for the Treatment of Goodwill on Guru’S Retirement - CBSE (Arts) Class 12 - Accountancy

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Question

Kavi, Ravi, Kumar and Guru were partners in the firm sharing profits in the ratio of 3:2:2:1. On 1.2.2017, Guru retired and the new profit sharing ratio decided between Kavi, Ravi and Kumar were 3:1:1. On Guru’s retirement, the goodwill of the firm was valued at Rs 3, 60,000. Showing your working notes clearly, pass necessary journal entry in the books of the firm for the treatment of goodwill on Guru’s retirement

Solution

Journal
Date Particulars L.F

Dr.

Rs

Cr.

Rs

 

Kavi’s Capital A/c             Dr.

       To Ravi’s Capital A/c

       To Kumar’s Capital A/c

       To Guru’s Capital A/c

(Being new goodwill adjusted)

 

81,000

 

 

 

 

 

18,000

18,000

45,000

 

Working Note:

Gaining Ratio = New Ratio - Old Ratio

Kavi = `3/5 - 3/8`

= `(24 - 15)/40`

`= 9/40`

Ravi = `1/5 - 2/8`

`= (8 - 10)/40`

`= 2/40 ("sacrificing")`

Kumar = `1/5  2/8`

`= (8 - 10)/40`

= `-2/40` (sacrificing)

Goodwill Valued = 360000

kavi = Rs `360000 xx 9/40 = Rs  81000`

Ravi = `Rs 360000 xx 2/40 = Rs 18000`

Kumar =  `Rs 360000 xx 2/40 = Rs 18000`

Guru = `Rs 360000 xx 1/8 = Rs  45000`

  Is there an error in this question or solution?
Solution Kavi, Ravi, Kumar and Guru Were Partners in the Firm Sharing Profits in the Ratio of 3:2:2:1. on 1.2.2017, Guru Retired and the New Profit Sharing Ratio Decided Between Kavi, Ravi and Kumar Were 3:1:1. on Guru’S Retirement, the Goodwill of the Firm Was Valued at Rs 3, 60,000. Showing Your Working Notes Clearly, Pass Necessary Journal Entry in the Books of the Firm for the Treatment of Goodwill on Guru’S Retirement Concept: Retirement Or Death of a Partner - Treatment of Goodwill.
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