A, B and C are partners sharing profits and losses in the ratio of 4 : 3 : 2. B retires and the goodwill is valued at Rs 1,08,000. A and C decided to share future profits and losses in the ratio of 5 : 3. Record necessary journal entry.
Answer & explanation
Correct answer: option 4
The correct answer is Option (4)-
A's capital A/c Dr Rs 19,500
C's capital A/c Dr Rs 16,500
To B's capital A/c Rs 36,000
Old ratio = 4:3:2
B retires and new ratio = 5:3
Gain of A = 5/8 - 4/9
= (45-32)/72
= 13/72
Gain of C = 3/8 - 2/9
= (27-16)/72
= 11/72
Gaining ratio is 13/72 : 11/72 or 13:11
Goodwill = 1,08,000
B's share in goodwill = 1,08,000 x 3/9
= 36,000
This 36000 will be given to B by A & C in gaining ratio.
A will have = 36,000 x 13/24
= 19,500
B will have = 36,000 x 11/24
= 16,500
So, journal entry will be-
A's capital A/c Dr Rs 19,500
C's capital A/c Dr Rs 16,500
To B's capital A/c Rs 36,000