A, B and C are partners sharing Profit in the ratio 1:1:1. They decided to share their profits in 5:3:2 in future. For this purpose, the goodwill of the firm was valued at ₹4,80,000. Pass the journal entry for the adjustment of goodwill.

 A's Capital A/c Dr   ₹80,000
          To B's Capital A/c        ₹16,000
          To C's Capital A/c        ₹64,000
(Adjustment of goodwill)

The correct answer is option 2-
 A's Capital A/c Dr   ₹80,000
          To B's Capital A/c        ₹16,000
          To C's Capital A/c        ₹64,000
(Adjustment of goodwill)

A, B and C Old ratio = 1:1:1
A, B and C new ratio= 5:3:2 
Gaining Ratio = New ratio-Old Ratio
A = 5/10 - 1/3
   = (15-10) /30
   = 5/30

B = 3/10 - 1/3
   = (9 -10) /30
   = -1/30 means Sacrifice

C = 2/ 10 - 1/3
   = (6 -10) /30
   = -4/30 means Sacrifice

Only Partner A is gaining. So he will compensate both B & C.
A - 4,80,000 * 5/30
  = 80,000
B - 4,80,000 * 1/30
    = (16,000)
C - 4,80,000 * 4/30
  = ( 64,000)

So, journal entry will be passed with B & C are credited for the sacrifice and A will be debited.
 A's Capital A/c Dr   ₹80,000
          To B's Capital A/c        ₹16,000
          To C's Capital A/c        ₹64,000