The Question : Suresh, Ramesh and Tushar were partners of a firm sharing profits in the ratio of 6:5:4. Ramesh retired and his capital after making adjustments on account of reserves, revaluation of assets and reassessment of liabilities stood at ₹ 2,50,400. Suresh and Tushar agreed to pay him ₹ 2,90,000 in full settlement of his claim. Pass necessary journal entry for the treatment of goodwill. Show workings clearly.
Solution for the question :
JOURNAL ENTRYDateParticularsL.F.Dr. AmountCr. AmountSuresh’s Capital A/c Dr. Tushar’s Capital A/c Dr23,760 15,840Ramesh’s Capital A/c (Being goodwill adjusted) 39,600Working Note: Ramesh’s share of Goodwill= ₹2,90,000 – ₹2,50,400 = ₹39,600
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