Rohan, Mohan and Sohan were partners in a firm sharing profits in the ratio of 5:3:2. Mohan retired and on his retirement goodwill of the firm was valued at ₹1,20,000. Rohan and Sohan decided to share future profits in the ratio 2:3. Record Journal entry for the treatment of Goodwill.
Answer & explanation
Correct answer: option 2
The correct answer is Option (2) → Sohan's Capital A/c Dr 48,000 To Rohan's Capital A/c 12,000 To Mohan's Capital A/c 36,000
Gain or sacrifice = new share − old share
Rohan = 2/5 − 5/10 = −1/10 (a sacrifice)
Sohan = 3/5 − 2/10 = 4/10 (a gain)
Mohan’s share of goodwill = ₹1,20,000 × 3/10 = ₹36,000
Rohan’s sacrifice = ₹1,20,000 × 1/10 = ₹12,000
Sohan, the only gaining partner, is debited with ₹1,20,000 × 4/10 = ₹48,000, credited to Mohan ₹36,000 and Rohan ₹12,000.
Note: In the book’s solution the figure 36,000 (Neeru’s credit) is printed in the Debit column; it belongs to the Credit column, as 48,000 = 36,000 + 12,000 shows.
NCERT (2026-27 edition):
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