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# X, Y And Z Are Partners Sharing Profits and Losses in the Ratio of 5 : 3 : 2, Decided to Share Future Profits and Losses - CBSE (Arts) Class 12 - Accountancy

ConceptRetirement and Death of a Partner - Calculation of New Profit Sharing Ratio

#### Question

X, Y and Z are partners sharing profits and losses in the ratio of 5 : 3 : 2, decided to share future profits and losses equally with effect from 1st April, 2019. On that date, the goodwill appeared in the books at ₹ 12,000. But it was revalued at ₹ 30,000. Pass Journal entries assuming that goodwill will not appear in the books of account.

#### Solution

Journal

 Date Particulars L.F. Debit Amount (₹) Credit Amount (₹) 2019April  1 X’s Capital A/c Dr. 6,000 Y’s Capital A/c Dr. 3,600 Z’s Capital A/c Dr. 2,400 To Goodwill A/c 12,000 (Goodwill written off) 2019 Y’s Capital A/c Dr. 1,000 April 1 Z’s Capital A/c Dr. 4,000 To X’s Capital A/c 5,000 (Amount of goodwill adjusted on change in profit sharing ratio)

Working Notes:

WN 1 Calculation of Sacrificing (or Gaining) Ratio

Old Ratio (X, Y and Z) = 5 : 3 : 2

New Ratio (X, Y and Z) = 1 : 1 : 1

Sacrificing (or Gaining) Ratio = Old Ratio − New Ratio

X's share = 5/10 - 1/3 = (15-10)/30 = 5/10 (sacrifice)

Y's share = 3/10 - 1/3 = (9-10)/30 = (-1)/30 (gain)

Z's share = 2/10 - 1/3 = (6-10)/30 = (-4)/30 (gain)

WN 2 Writing off of Old Goodwill

X's share = 12,000 xx 5/10 = Rs 6,000

Y's share = 12,000 xx 3/10 = Rs 3,600

Z's share = 12,000 xx 5=2/10 = Rs 2,400

Amount to be credited tp X's capital A/c = 30,000 xx 5/30(share of sacrifice)

= Rs 5,000

Amount to be debited tp Y's capital A/c = 30,000 xx 1/30(share of gain)

= Rs 1,000

Amount to be debited to Z's capital A/c = 30,000 xx 4/30(share of gain)

= Rs 4,000

Is there an error in this question or solution?

#### APPEARS IN

Solution X, Y And Z Are Partners Sharing Profits and Losses in the Ratio of 5 : 3 : 2, Decided to Share Future Profits and Losses Concept: Retirement and Death of a Partner - Calculation of New Profit Sharing Ratio.
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