Question

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 & C shall be debited if it has been decided that the goodwill shall be raised at its full value & written off immediately ?

• A. None of the above
• B. Rs 45,000 & Rs 15,000
• C. It shall not be debited
• D. Rs 30,000 & Rs 10,000

Answer 1

The correct option is B

Rs 45,000 & Rs 15,000

Goodwill shall be written off and debited to remaining partners in the gaining ratio which is also the new ratio.

A's share of goodwill = 3/4 $\times$ 60,000 = Rs 45,000

C's share of goodwill = 1/4 $\times$ 60,000 = Rs 15,000

Rs 45,000 and Rs 15,000