Akash, Bhupesh, and Charan are partners in a firm sharing profits in the ratio of 3:2:1. Bhupesh retired and goodwill of the firm was valued at Rs. 60,000. Akash and Charan continue the business, sharing profits in the ratio of 3:1. What will be the journal entry for adjustment of goodwill in this case?
Answer & explanation
Correct answer: option 1
The correct answer is Option (1) → Akash’s Capital A/c Dr. 15,000; Charan’s Capital A/c Dr. 5,000; To Bhupesh’s Capital A/c 20,000
A retiring partner is paid for his share of goodwill by the partners who gain his share, in their gaining ratio. Goodwill is not raised in the books, so the gaining partners’ capital accounts are debited and the retiring partner’s capital account is credited.
Bhupesh’s share of goodwill = Rs. 60,000 × 2/6 = Rs. 20,000
Akash’s gain = 3/4 − 3/6 = 9/12 − 6/12 = 3/12
Charan’s gain = 1/4 − 1/6 = 3/12 − 2/12 = 1/12
Gaining ratio = 3:1
Akash = Rs. 20,000 × 3/4 = Rs. 15,000
Charan = Rs. 20,000 × 1/4 = Rs. 5,000
Note: This question is from NCERT (2026-27). NTA sets numerical questions from NCERT too, so do not ignore NCERT while practising numericals.
NCERT (2026-27 edition):
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