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S, T and U were partners in a firm sharing profits in the ratio of 1 : 2 : 2. On 15-2-2015 S died and the new profit sharing ratio of T and U was 3 : 2. On S's death the goodwill of the firm was valued at Rs 60,000.

Calculate the gaining ratio and pass necessary journal entry on S's death for the treatment of goodwill.


Solution

Calculation of Gaining Ratio :

Gaining Ratio of T=3525=15

Gaining Ratio of U=2525=0

DateParticularsL.F.Dr.(Rs)Cr. (Rs)2015T's Capital A/cDr.12,000Feb.15    To S's Capital A/cDr.12,000(T's Capital account debited as he alone has gained onS's death)

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