Question

Vibha, Sudha and Ashish were partners in a firm sharing profits in the ratio 2:3:1. Sudha retired and the balance in her capital account after making necessary adjustments on account of reserves, revaluation of assets and re-assessment of liabilities was ₹ 85,000. Vibha and Ashish agreed to pay Sudha ₹ 1,15,000 in full settlement of her claim. Record the necessary journal entry for goodwill on Sudha's retirement.

Answer 1

Journal Entry
Date	Particulars	L.F.	Debit (₹)	Credit (₹)
	Vibha's Capital A/c      ...Dr.		20,000
	Ashish's Capital A/c    ...Dr.		10,000
	To Sudha's Capital A/c			30,000
	(Being the goodwill adjusted)

Goodwill = Total amount to be paid Sudha - Closing balance in Sudha's A/c

= 1,15,000 - 85,000 = ₹ 30,000

Sharing Ratio = 2 : 3 : 1

Share of Vibha and Ashish = 2 : 1

Share of Sudha shared among Vibha and Ashish in ratio 2 : 1 in absence of any ratio given