A, B and C were partners in a firm sharing profits in the ratio of 6 : 5 : 4. Their capitals were A : Rs 1,00,000, B : Rs 80,000 and C:Rs 60,000 respectively. On 1st April, 2009, C retired from the firm and the new profit sharing ratio between A and B was decided as 11 : 4. On C's retirement, the goodwill of the firm was valued at Rs 90,000. Showing your calculations clearly, pass necessary Journal Entry for the treatment of goodwill on C's retirement.

Q. A,B and C were partners in a firm sharing profits in the ratio of

5 : 3 : 2

. On

31 - 3 - 2015

their Balance Sheet was as follows:
On the above date B retired and A and C agreed to continue the business on the following terms :
(1) Goodwill of the firm was valued at Rs.

1, 53, 000

.
(2) Provision for bad debts was to be reduced by

R s . 3, 000

. (3) There was a claim of Rs.

12, 000

for workmen compensation.
(4) B will be paid

R s . 24, 600

in cash and the balance will be transferred to his loan account which will be paid in four equal yearly installments together with interest

@ 10 %

p.a.
(5) The new profit sharing ratio between A and C will be

3 : 2

and their capital will be in their new profit sharing ratio. The capital adjustments will be done by opening current accounts.
Prepare Revaluation Account Partners' Capital Accounts and the Balance Sheet of A and C.

Q. A and B are partners with the capital Rs. 1,00,000 and Rs. 80,000 respectively. They share profits and losses equally. C is admitted on bringing Rs. 50,000 as capital only and nothing was bought against goodwill. Goodwill in Balance sheet of Rs. 40,000 is revalued as Rs. 70,000. What will be value of goodwill in the books after the admission of C?

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Particulars	Amount (Rs.)	Particulars	Amount (Rs.)
To B's loan A/c	141640	By balance b/d By reserves A/c By goodwill A/c By Profit on revaluation A/c	100000 12000 24000 5640
	141640		141640

The correct option is A Rs.1,41,640Calculation of amount transferred to B's loan A/c : B's Capital A/c Particulars Amount (Rs.) Particulars Amount (Rs.) To B's loan A/c 141640 By balance b/dBy reserves A/cBy goodwill A/cBy Profit on revaluation A/c 100000 12000 24000 5640 141640 141640

The correct option is A $R s .1, 41, 640$
Calculation of amount transferred to B's loan A/c :
B's Capital A/c
Particulars Amount
(Rs.) Particulars Amount
(Rs.)
To B's loan A/c 141640 By balance b/d
By reserves A/c
By goodwill A/c
By Profit on revaluation A/c 100000
12000
24000
5640
141640 141640