Question

Sangeeta, Saroj and Shanti are partners sharing profits in the ratio of 2:3:5. Goodwill is appearing in the books at a value of Rs 60,000. Sangeeta retires and goodwill is valued at Rs 90,000. Saroj and Shanti decided to share future profits equally. Record necessary Journal entries.

Answer 1

Books of Saroj and Shanti Journal
Date	Particulars		L.F.	Amount Rs	Amount Rs
	Sangeeta’s Capital A/c	Dr.		12,000
	Saroj’s Capital A/c	Dr.		18,000
	Shanti’s Capital A/c	Dr.		30,000
	To Goodwill A/c				60,000
	(Goodwill written off)
	Saroj’s Capital A/c	Dr.		18,000
	To Sangeeta’s Capital A/c				18,000
	(Sangeeta’s share of goodwill adjusted to Saroj’s Capital Account in her gaining ratio)

Working Notes:

1. Sangeeta’s share of goodwill.

Total goodwill of the firm ´ Retiring Partner’s share

2. Gaining Ratio = New Ratio – Old Ratio

Saroj’s Gaining Share

Shanti’s Gaining Share