Read the following passage and answer the question.
Ravi, Kavi and Sunny are partners in a firm sharing profits and losses in the ratio 4 : 2 : 3. On 1st April 2022, Sunny gives notice for his retirement. His share was taken by Ravi and Kavi in 13 : 11 and goodwill of the firm was valued at ₹ 72,000.
After three months, they admit Hari as a new partner for 1/5th share in firm who brings ₹ 2,00,000 as capital and necessary amount for goodwill in cash which was valued at ₹ 80,000 for the firm. Hari acquired his share equally from Ravi and Kavi.
Identify, what entry will be passed for adjustment of goodwill on Sunny's retirement?
Answer & explanation
Correct answer: option 3
The correct answer is Option (3) → Ravi's capital A/c Dr 13,000 Kavi's capital A/c Dr 11,000 To Sunny's Capital A/c 24,000
When goodwill does not appear in the books, the retiring partner is given credit for his share of goodwill and the gaining partners are debited in their gaining ratio.
Sunny's share of goodwill = ₹72,000 × 3/9 = ₹24,000
Ravi's Capital A/c Dr = ₹24,000 × 13/24 = ₹13,000
Kavi's Capital A/c Dr = ₹24,000 × 11/24 = ₹11,000
Sunny's Capital A/c Cr = ₹24,000
NCERT (2026-27 edition):
NCERT (2026-27 edition):
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