Question

X; Y and Z are partners sharing profits in the ratio of 2 : 3 : 5. Goodwill is already appearing in their books at a value of ₹ 60,000. X retires and Y and Z decided to share future profits equally. Journal entry will be:

Options

• Y’s Capital A/c      ...Dr.	12,000
  To X’s Capital A/c		12,000

• Y’s Capital A/c      ...Dr.	60,000
  To X’s Capital A/c		60,000

• X’s Capital A/c      ...Dr.	2,400
  Y’s Capital A/c      ...Dr.	3,600
  Z’s Capital A/c      ...Dr.	6,000
  To Goodwill A/c		12,000

• X’s Capital A/c      ...Dr.	12,000
  Y’s Capital A/c      ...Dr.	18,000
  Z’s Capital A/c      ...Dr.	30,000
  To Goodwill A/c		60,000

Answer 1

X’s Capital A/c      ...Dr.	12,000
Y’s Capital A/c      ...Dr.	18,000
Z’s Capital A/c      ...Dr.	30,000
To Goodwill A/c		60,000

Explanation:

Goodwill of the firm = 60,000

Partners sharing profits ratio = 2 : 3 : 5

X = `60,000xx2/10` = 12,000

Y = `60,000xx3/10` = 18,000

Z = `60,000xx5/10` = 30,000