A, B, and C are partners in a firm sharing profits in the ratio of 3:2:1. B retires. The goodwill of the firm is valued at Rs. 60,000 and the remaining partners A and C continue to share profits in the ratio of 3:1. By what amounts will the capital accounts of A and C be debited if it has been decided that the goodwill shall not be shown in books?

Rs. 17,000 and Rs. 13,000

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Rs 20,000 & Rs 10,000

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It shall not be debited

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Rs 15,000 & Rs 5,000

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Solution

The correct option is D
Rs 15,000 & Rs 5,000

B's share of goodwill shall be raised by crediting his capital account by Rs 20,000 & then written off by debiting remaining partner`s capital accounts in gaining ratio.

B's share of goodwill = 2/6 * 60,000 = 20,000

A's part in B's share of goodwill = 3/4 * 20,000 = 15,000

C's part in B's share of goodwill = 1/4 * 20,000 = 5,000

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