$X, Y$ and $Z$ are partners sharing profits and losses in the ratio of $5 : 3 : 2$ ,decided to share future profits equally with effect from $1 s t$ April, $2018$ . On that date, the goodwill appeared in the books at Rs. $12, 000$ . But it was revalued at Rs. $3, 000$ . Pass journal entries assuming that goodwill will not appear in the books of account.

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Solution

1. X's Capital A/c.........Dr. 6000
Y's Capital A/c.........Dr. 3600
Z's Capital A/c.........Dr. 2400
To Goodwill A/c 12000
(Being existing Goodwill written off in old ratio)
2. Y's Capital A/c.........Dr. 100
Z's Capital A/c.........Dr. 400
To X's Capital A/c 500
(Being goodwill shared among the partners)
workings:
X: 1/3 - 5/10 = (5/30) Sacrifice ratio
Y: 1/3 - 3/10 = 1/30 Gaining ratio
Z: 1/3 - 2/10 = 4/30 Gaining Ratio

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